Market analysis

Date: Monday, 22 of December 2025

EUR/US D : D rifts down with ECB on pause and US inflation cools

GBP/USD : BoE delivers final cut of the year

USD/JPY : Jumps to one-month high as Yen slides after BoJ rate hike

Dow Jones : E nds higher as tech rally continues, led by Micron

Gold : H its new record-high on escalating geopolitical tensions

Crude Oil : Edges higher but set for weekly drop as oversupply fears

Drifts down with ECB on pause and US inflation cools.

Euro edges lower after a packed data day, with soft US inflation and a steady-handed ECB failing to spark momentum . Delayed data from the US revealed that November’s inflation figures, both headline and core, dipped to their lowest level since early 2021, revealed the US Bureau of Labor Statistics (BLS). Even though this opens the door for further ease, a double whammy looms as jobless claims for the last week, improved, exceeding economists’ estimates . Across the pond in Brussels, the ECB held ratees unchanged as expected, and a Bloomberg sources article hinted that the cycle of rate cuts is “most likely over,” read the headline. ECB’s President Christine Lagarde said that the decision was unanimous, and that they would stick to its “meeting-by-meeting approach.” After the data and the ECB’s decision, the EUR/USD remained at around familiar levels, unchanged. Traders focus shifts to the release of the Fed’s favorite inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index along with the University of Michigan Consumer Sentiment Index for its final release. In Europe, traders would eye speeches of ECB’s Mario Cipollone, Martin Kocher, and Current Account data for October. EUR/USD languishes near 1.1710 on Friday's US session opening times, down from the three-month highs, above 1.1800, hit earlier this week. The pair is on track to close the week with moderate losses, as the US Dollar picks up against its main peers. The Euro e xtended losses on Thursday after the European Central Bank (ECB) left interest rates unchanged, as widely expected, and ECB President Christine Lagarde refused to commit to any rate path. Lagarde affirmed that the decision was taken unanimously and there was no discussion about changing interest rates, suggesting that market speculation about a rate hike is unfounded. In the US, November's Consumer Price Index (CPI) revealed an unexpected decline in inflation, with the year-on-year rate easing to 2.7% from 3.0% in September, as October's reading was cancelled due to the US Government shutdown. The market has taken these figures with caution, and rightly so, as the Commerce Department affirmed that it only collected data from the second half of the month, with the Black Friday sales already in progress. EUR/USD breaks its four-day losing streak, trading around 1.1720 during the Asian hours on Monday. On the daily chart, technical analysis indicates a prevailing bullish bias, as the pair remains slightly above the ascending channel pattern. Additionally, the 14-day Relative Strength Index (RSI) at 61.63 remains in bullish territory, confirming firm momentum. RSI above 60 reinforces upward pressure and could sustain tests of nearby ceilings.

Euro holding above both averages supports continuation. The positive moving-average alignment keeps the path of least resistance to the upside.

https://www.fxstreet.com/news/eur-usd-drifts-down-with-ecb-on-pause-and-us-inflation-cools-202512182326

EUR/USD

GBP/USD

BoE delivers final cut of the year.

The GBP/USD pair hovers around familiar levels, The Bank of England’s (BoE) 25bp rate cut to 3.75% came with a cautious message, limiting dovish surprise and offering modest support to sterling despite slowing growth and still-elevated inflation, Commerzbank's FX analyst Norman Liebke notes . "Inflation in the UK has also fallen significantly to 3.2% since its peak in October 2022 (11.1%), but the Bank of England has so far been unable to bring inflation down to its 2% target on a permanent basis. The big question is how many interest rate cuts are still on the table. On the one hand, we have a weakening economy, which tends to argue for interest rate cuts, but on the other hand, inflation remains at a high level, which makes further interest rate cuts difficult to justify. We expect another interest rate cut next year, but probably not until April." "The actual decision can be viewed as cautiously positive for the British pound. In recent years, the Bank of England has often been good for a dovish surprise, but this time, despite the surprise downward shift in inflation and the rather weak labor market figures this week, there was no such surprise. This dilemma between high inflation and a weakening economy can be interpreted in favor of the pound, provided that interest rate cuts are made with appropriate caution." The GBP/USD pair hovers around familiar levels , yet it has dropped below the 1.3400 mark on Friday after Retail Sales in the UK missed estimates and Federal Reserve (Fed) speakers crossed the wires. At the time of writing, the pair trades at around 1.3370, virtually unchanged. Sterling eases after disappointing UK consumption data, while cautious BoE and Fed rhetoric keep downside risks alive . Sales in the UK rose by 0.6% YoY in November, unchanged from the previous print but missed estimates of 0.9% expansion. On a monthly basis, figures fell 0.1%, beneath forecasts of a 0.4% expansion, reported by the Office for National Statistics (ONS) a day after the Bank of England (BoE) cut rates due to cooling inflation. On Thursday, the BoE reduced borrowing costs on a 5-4 vote split. BoE Governor Andrew Bailey opted to support the hawks and added that the interest rate path is uncertain, while highlighting that inflation-persistence data shows positive signs, but risks remain balanced. In the US, New York Fed President John Williams said that some data shows more disinflation, while acknowledging that the “Unemployment rate may have been pushed up by distortions, maybe by a tenth, but not a surprising read.” He added that he does not have the urgency to change monetary policy. GBP/USD gains ground after three days of losses, trading around 1.3390 during the Asian hours on Monday. The pair depreciates as the Pound Sterling (GBP) holds ground ahead of the release of the United Kingdom (UK) Gross Domestic Product (GDP) for the third quarter. The British Pound may face headwinds as markets have fully priced in a first interest rate cut by the Bank of England (BoE) in June 2026, while the probability of a March cut stands at a relatively high 40%, according to Capital Edge rate probability data.

http://fxstreet.com/news/gbp-usd-drifts-lower-as-uk-data-disappoints-and-fed-cautious-tone-caps-upside-202512191604

GBP/USD

USD/JPY

Jumps to one-month high as Yen slides after BoJ rate hike.

The Japanese Yen weakens sharply against the US Dollar (USD) on Friday as the Yen slumps across the board following the Bank of Japan’s interest rate decision. At the time of writing, USD/JPY is trading around 157.48, up nearly 1.20%, its highest level since November 21. The BoJ raised its policy rate by 25 basis points (bps) to 0.75%, marking the highest level in roughly three decades. The central bank stated that Japan’s economy has continued to recover at a moderate pace, with tight labor market conditions and solid corporate profits supporting steady wage increases. Policymakers also noted that underlying inflation has been rising gradually, helped by firms passing higher labor costs on to prices, increasing confidence that inflation can be sustained around the 2% price stability target over time. However, the BoJ also stressed that real interest rates remain significantly negative and that accommodative financial conditions will continue to support the economy. The central bank said it will continue to adjust policy in line with developments in economic activity, prices, and financial conditions, signaling a cautious approach to further tightening. The Japanese Yen (JPY) retains its bullish bias through the early European session Today , though it lacks bullish conviction amid a combination of diverging forces. Rising tensions between the US and Venezuela, along with concerns about renewed Israel-Iran conflict and persistent uncertainties stemming from the protracted Russia-Ukraine war, underpin the JPY's safe-haven status. Furthermore, comments from Japan’s top foreign exchange official, Atsushi Mimura, fueled speculation about a possible government intervention and provided an additional lift to the JPY. Meanwhile, Bank of Japan (BoJ) Governor Kazuo Ueda left the door open to further tightening, though he remained vague on the exact timing and pace of future rate hikes. Adding to this, worries about Japan's worsening fiscal condition, aggravated by the recent steep rise in Japanese government bond (JGB) yields, cap gains for the JPY. However, a modest US Dollar (USD) downtick keeps the USD/JPY pair depressed below mid-157.00s and warrants caution before positioning for an extension of Friday's post-BoJ rise to the 158.00 neighborhood, or a multi-month peak touched in November.

https://www.fxstreet.com/news/usd-jpy-jumps-to-one-month-high-as-yen-slides-after-boj-rate-hike-202512191842

USD/JPY

Dow Jones

Ends higher as tech rally continues, led by Micron.

U.S. stocks closed higher on Friday after a rocky start to the week, as a rebound in technology shares offset tumbling consumer stocks such as Nike. Mega caps extended gains from Thursday, when chipmaker Micron Technology’s strong forecasts re-ignited optimism around AI-related shares, which had recently come under pressure over lofty valuations and funding concerns. Micron reached a record closing high on Friday, ending the day up 7%. Nvidia rose 3.9% as the U.S. launched a review that could allow the first shipments to China of Nvidia’s second-most powerful AI chip. Meanwhile, Oracle jumped 6.6% after TikTok’s Chinese owner, ByteDance, signed binding agreements to hand control of the short-form video app’s U.S. operations to a group of investors, including the cloud computing giant. "Tech in general, particularly the AI-related companies, came under a fair amount of pressure and when Micron reported [on Wednesday] and the market reacted the way that it did, there’s the idea that maybe people can come back to these [stocks]," said Thomas Martin, senior portfolio manager at Global Investments. December has also traditionally been a strong period for stock markets. Since 1950, the so-called Santa Claus rally has been reflected by the S&P 500 rising by an average of 1.3% over the last five trading days of the year and the first two trading days in January, according to the Stock Trader’s Almanac. The Dow Jones Industrial Average rose 183.04 points, or 0.38%, to 48,134.89, the S&P 500 gained 59.74 points, or 0.88%, to 6,834.50 and the Nasdaq Composite gained 301.26 points, or 1.31%, to 23,307.62. For the week, the S&P gained 0.11% and the Nasdaq rose 0.48%. Meanwhile, the Dow fell 0.67%. Seven of the S&P 500 sectors closed higher on Friday, while utilities and consumer staples stocks lost 1.34% and 0.49%, respectively. In consumer names, Nike shares slumped 10.5% after the sportswear giant reported a drop in gross margins for the second consecutive quarter, hurt by poor sales in China and efforts to reset its product mix. investors drew comfort from U.S. consumer prices rising less than expected in November, but some analysts flagged that the print could be distorted due to the 43-day government shutdown that prevented the collection of October data. Traders continued to bet on at least two 25-basis-point interest rate cuts next year from the Federal Reserve, according to LSEG data, while assigning a 20% chance to the first reduction as early as January. Analysts warned of higher volatility on Friday due to "triple witching," which is the quarterly, simultaneous expiration of stock options, stock index futures and stock index options contracts.

https://www.investing.com/news/stock-market-news/futures-edge-higher-on-tech-rebound-nike-slumps-on-china-pain-4416990

Dow Jones

Gold

Hits new record-high on escalating geopolitical tensions.

Gold gathers bullish momentum to the holiday-shortened week and trades at a new record-high above $4,400. The economic calendar will not offer any high-tier data releases on Monday, allowing investors to react to changes in risk perception. The precious metal gains momentum on the expectation of US Federal Reserve (Fed) interest rate cuts after signs of softer US inflation and cooler jobs reports. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. Additionally, persistent safe-haven demand amid the Israel-Iran conflict and the rise in US-Venezuela tensions might contribute to the yellow metal’s upside. It’s worth noting that traders seek assets that can preserve value during periods of uncertainty, which supports the gold price. Gold decline d to below $4,350 during the early European trading hours on Friday. The precious metal edges lower due to some profit-taking and weak long liquidation from shorter-term futures traders. Nonetheless, the potential downside for the yellow metal might be limited amid rising expectations of further US Federal Reserve (Fed) rate cuts after the US Consumer Price Index (CPI) inflation cooled unexpectedly in November. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. Gold extend ed its upside to near seven-week highs above $4,350 during the early European trading hours on Wednesday. The precious metal gains momentum as the US labor market remains relatively resilient but shows signs of slowing. The mixed US employment report for November reinforces bets of further rate cuts by the US Federal Reserve (Fed) and weighs on the US Dollar (USD). Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. The US central bank delivered its third 25-basis-point rate cut at the December policy meeting last week. However, Fed policymakers are divided on whether additional rate cuts are needed in 2026. The median Fed official penciled in just one reduction next year, but some policymakers see no further cuts. Traders await the Fed speak later on Wednesday. New York Fed President John Williams and Atlanta Fed President Raphael Bostic are set to speak. Any hawkish comments from policymakers could lift the Greenback and undermine the USD-denominated commodity price in the near term.

Financial markets are likely to trade in a subdued mood, and traders might book profits ahead of the long holiday period. This, in turn, might cap the upside for the precious metal .

https://www.fxstreet.com/news/forex-today-gold-hits-new-record-high-on-escalating-geopolitical-tensions-202512220652

GOLD

Crude Oil

Edges higher but set for weekly drop as oversupply fears.

Oil prices rose Friday but were set for a second straight weekly decline as persistent concerns about a global supply glut dominated market sentiment, outweighing support from geopolitical supply risks . Markets have been weighed down by expectations that global oil supply will continue to outpace demand into 2026, with rising output from non-OPEC producers and subdued consumption growth in major economies keeping inventories well supplied. The Organization of the Petroleum Exporting Countries (OPEC) and its allies have steadily increased output this year as they are unaware of earlier voluntary cuts, adding significant volumes to an already well-supplied global market. Weak demand in China has compounded these concerns. The world’s largest crude importer has seen slower growth in industrial output and consumer activity, limiting fuel consumption gains Recent data pointing to comfortable crude and fuel stockpiles in the United States and parts of Asia reinforced the view that the market remains well cushioned against disruptions. investors continued to closely monitor potential supply risks. One area of focus has been the possibility of further U.S. sanctions against Russia’s energy sector if efforts to secure a peace deal in Ukraine fail. Traders have also been assessing risks surrounding Venezuelan oil exports following recent U.S. enforcement actions. Concerns have grown over the potential for a blockade of Venezuelan oil tankers, which could disrupt shipments of crude to international markets. Venezuela has already struggled to maintain stable exports under existing sanctions, and stricter enforcement could further curb its ability to move oil abroad.

U.S. President Donald Trump on Thursday said he believes talks toward ending the war in Ukraine are "getting close to something" ahead of a U.S. meeting with Russian officials this weekend. In the other potential geopolitical catalyst, it was ​ not immediately clear how the U.S. would enforce Trump ’ s announcement to blockade tankers under sanctions entering and leaving Venezuela, which makes up around 1% of global supplies. In an unprecedented move, the U.S. ‌ Coast Guard last week seized a Venezuelan ​ oil tanker.

https://www.investing.com/news/commodities-news/oil-prices-set-for-weekly-drop-as-oversupply-fears-eclipse-disruption-risks-4416396

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MAJOR DATA RELEASED DURING LAST WEEK

MAJOR DATA COMING OUT THIS WEEK (Time zone GMT+2)

Disclaimer

Moving Average Convergence/Divergence (MACD):

MACD uses different exponential moving averages to generate buy and sell indicators. The lower pane of the chart shows two lines: a Differential Line and a Signal Line. The Differential Line is the difference between a short and long-period exponential moving average, typically 12 and 26 periods. The Signal Line is typically a 9-period exponential moving average. When the DL crosses the SL from above, a sell indicator is generated, and when it crosses from below a buy signal is generated.

Relative Strength Index (RSI):

This is a momentum indicator that measures a security's price in relation to itself. The lower pane of the chart shows a line that fluctuates on a scale of 0 to 100. Typically buy signals are generated at 30 and sell signals are generated at 70. If the line breaks 30, the security is oversold, and a reversal is imminent. If the line breaks 70, it is overbought and is due for a downward correction.

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