Re: Daily Forex Update Fundamental And Technical.
Posted: Sun Dec 07, 2025 2:23 am
Forex Weekly Outlook: Major Pairs Gain Ahead of Fed Decision.
Headlines & Market Snapshot Summary
Major currency pairs begin the week with cautious optimism as traders await the Federal Reserve’s highly anticipated policy decision. Expectations of a dovish Fed continue weighing on the US Dollar, supporting bullish momentum across EUR/USD, GBP/USD, USD/JPY, and AUD/USD. With bond yields stabilizing and global sentiment improving, markets are preparing for a potentially pivotal week driven by economic data and central-bank guidance.
Market Overview
Currency markets are trading with a supportive tilt toward risk assets as the US Dollar softens ahead of the Federal Reserve’s December rate announcement. A 25 bps rate cut is fully priced in, while investors await updated economic projections and forward guidance to gauge the policy path into 2026.
The Euro and Pound maintain upward momentum as European and UK fundamentals hold steady, while the Yen stabilizes amid BoJ normalization expectations. The Australian Dollar benefits from upbeat risk sentiment and narrowing rate differentials. This week’s key drivers include the Fed decision, US labor data, inflation indicators, and global yield movements.
Technical Summary (Compact Table)
Pair Trend RSI Stochastic Key Levels (R1 / S1) Direction Trade Suggestion
EUR/USD Bullish 57.79 (Buy Zone) 85.22 (Buy) R1: 1.1646 / S1: 1.1502 Buy Buy 1.1623 → TP 1.1682, SL 1.1595
GBP/USD Bullish 61.45 (Buy Zone) 88.38 (Buy) R1: 1.3268 / S1: 1.3070 Buy Buy 1.3274 → TP 1.3470, SL 1.3171
USD/JPY Mixed-to-Bullish 53.67 (Buy Zone) 29.48 (Sell) R1: 157.55 / S1: 153.67 Buy Buy 154.70 → TP 156.35, SL 153.98
AUD/USD Strong Bullish 68.60 (Buy Zone) 95.91 (Buy) R1: 0.6578 / S1: 0.6456 Buy Buy 0.6611 → TP 0.6667, SL 0.6587
Analyst Commentary Per Asset
EUR/USD — Bullish Bias Ahead of Fed
EUR/USD trades near two-month highs after a strong rally powered by USD weakness. Traders anticipate a dovish Fed stance next week, with markets pricing in another 25 bps rate cut. Euro strength is supported by steady ECB policy and improving sentiment across Eurozone yields. A break above 1.1680 could open the path toward 1.1750 if the Fed signals deeper easing for 2026.
GBP/USD — Sterling Extends Gains on Fiscal Stability & USD Weakness
GBP/USD remains strong as the UK’s fiscal update boosted confidence without imposing heavy burdens on households. Upgraded GDP forecasts and broad USD selling helped push the pair above 1.3350. This week’s Fed meeting, along with UK monthly GDP data, will be key for Sterling’s next directional push.
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USD/JPY — Consolidating Ahead of Fed; BoJ Speculation Supports JPY
USD/JPY is steady but lacks strong directional conviction. The pair remains sensitive to Fed expectations, with potential downside risk if the Fed signals more aggressive easing. Meanwhile, the Yen is supported by expectations of BoJ normalization in 2026. Short-term moves will hinge on US labor data and Powell’s guidance.
1765033839405.png
AUD/USD — Strong Uptrend Supported by Risk Appetite
AUD/USD holds firm near recent highs as global risk sentiment improves and the US Dollar weakens. The RBA’s cautious stance, coupled with resilient domestic data, supports AUD momentum. If the Fed maintains a dovish tone, the pair may target 0.6750–0.6800 in the coming sessions.
1765033848503.png
AI Q&A Section (5 Questions & Answers)
1. Why is the US Dollar weakening this week?
Because markets expect the Federal Reserve to deliver a 25 bps rate cut and potentially signal further easing into 2026.
2. Which currency pair looks the strongest technically?
AUD/USD, with strong bullish indicators, high RSI, and firm trend structure.
3. What is the biggest risk event this week?
The FOMC interest rate decision, projections, and Powell’s press conference on Thursday.
4. Is GBP/USD likely to extend gains?
Yes—if the Fed signals deeper easing and UK GDP data comes in stronger than expected.
5. Can USD/JPY drop below 154.00 again?
Yes, if the Fed delivers a dovish surprise or if BoJ signals earlier-than-expected policy tightening.
Key Takeaways
Markets are positioned cautiously ahead of the critical Fed decision.
USD weakness is driving bullish momentum across EUR, GBP, and AUD.
AUD/USD shows the strongest technical setup among major pairs.
USD/JPY remains highly sensitive to yield spreads and Fed commentary.
This week’s economic calendar is heavily packed with Fed, BoC, RBA, SNB, GDP, JOLTS, and CPI data that may trigger high volatility.
Headlines & Market Snapshot Summary
Major currency pairs begin the week with cautious optimism as traders await the Federal Reserve’s highly anticipated policy decision. Expectations of a dovish Fed continue weighing on the US Dollar, supporting bullish momentum across EUR/USD, GBP/USD, USD/JPY, and AUD/USD. With bond yields stabilizing and global sentiment improving, markets are preparing for a potentially pivotal week driven by economic data and central-bank guidance.
Market Overview
Currency markets are trading with a supportive tilt toward risk assets as the US Dollar softens ahead of the Federal Reserve’s December rate announcement. A 25 bps rate cut is fully priced in, while investors await updated economic projections and forward guidance to gauge the policy path into 2026.
The Euro and Pound maintain upward momentum as European and UK fundamentals hold steady, while the Yen stabilizes amid BoJ normalization expectations. The Australian Dollar benefits from upbeat risk sentiment and narrowing rate differentials. This week’s key drivers include the Fed decision, US labor data, inflation indicators, and global yield movements.
Technical Summary (Compact Table)
Pair Trend RSI Stochastic Key Levels (R1 / S1) Direction Trade Suggestion
EUR/USD Bullish 57.79 (Buy Zone) 85.22 (Buy) R1: 1.1646 / S1: 1.1502 Buy Buy 1.1623 → TP 1.1682, SL 1.1595
GBP/USD Bullish 61.45 (Buy Zone) 88.38 (Buy) R1: 1.3268 / S1: 1.3070 Buy Buy 1.3274 → TP 1.3470, SL 1.3171
USD/JPY Mixed-to-Bullish 53.67 (Buy Zone) 29.48 (Sell) R1: 157.55 / S1: 153.67 Buy Buy 154.70 → TP 156.35, SL 153.98
AUD/USD Strong Bullish 68.60 (Buy Zone) 95.91 (Buy) R1: 0.6578 / S1: 0.6456 Buy Buy 0.6611 → TP 0.6667, SL 0.6587
Analyst Commentary Per Asset
EUR/USD — Bullish Bias Ahead of Fed
EUR/USD trades near two-month highs after a strong rally powered by USD weakness. Traders anticipate a dovish Fed stance next week, with markets pricing in another 25 bps rate cut. Euro strength is supported by steady ECB policy and improving sentiment across Eurozone yields. A break above 1.1680 could open the path toward 1.1750 if the Fed signals deeper easing for 2026.
GBP/USD — Sterling Extends Gains on Fiscal Stability & USD Weakness
GBP/USD remains strong as the UK’s fiscal update boosted confidence without imposing heavy burdens on households. Upgraded GDP forecasts and broad USD selling helped push the pair above 1.3350. This week’s Fed meeting, along with UK monthly GDP data, will be key for Sterling’s next directional push.
1765033832508.png
USD/JPY — Consolidating Ahead of Fed; BoJ Speculation Supports JPY
USD/JPY is steady but lacks strong directional conviction. The pair remains sensitive to Fed expectations, with potential downside risk if the Fed signals more aggressive easing. Meanwhile, the Yen is supported by expectations of BoJ normalization in 2026. Short-term moves will hinge on US labor data and Powell’s guidance.
1765033839405.png
AUD/USD — Strong Uptrend Supported by Risk Appetite
AUD/USD holds firm near recent highs as global risk sentiment improves and the US Dollar weakens. The RBA’s cautious stance, coupled with resilient domestic data, supports AUD momentum. If the Fed maintains a dovish tone, the pair may target 0.6750–0.6800 in the coming sessions.
1765033848503.png
AI Q&A Section (5 Questions & Answers)
1. Why is the US Dollar weakening this week?
Because markets expect the Federal Reserve to deliver a 25 bps rate cut and potentially signal further easing into 2026.
2. Which currency pair looks the strongest technically?
AUD/USD, with strong bullish indicators, high RSI, and firm trend structure.
3. What is the biggest risk event this week?
The FOMC interest rate decision, projections, and Powell’s press conference on Thursday.
4. Is GBP/USD likely to extend gains?
Yes—if the Fed signals deeper easing and UK GDP data comes in stronger than expected.
5. Can USD/JPY drop below 154.00 again?
Yes, if the Fed delivers a dovish surprise or if BoJ signals earlier-than-expected policy tightening.
Key Takeaways
Markets are positioned cautiously ahead of the critical Fed decision.
USD weakness is driving bullish momentum across EUR, GBP, and AUD.
AUD/USD shows the strongest technical setup among major pairs.
USD/JPY remains highly sensitive to yield spreads and Fed commentary.
This week’s economic calendar is heavily packed with Fed, BoC, RBA, SNB, GDP, JOLTS, and CPI data that may trigger high volatility.