Technical Analysis: Week 49, 2025
(EUR/USD | USD/JPY | JPN225)
Welcome to your weekly edge in the markets with clear, actionable insights. It’s split into two parts:
- Week Ahead – An overview of current market conditions, previewing the week ahead.
- Technical Analysis – our top 3 trade ideas for the week, complete with charts and key levels to watch.
Week Ahead
8 - 14 December, 2025
Markets move into the second week of December after a turbulent start to the month. A surge in Japanese government bond yields to 20-year highs set the tone for global fixed income, while slowing US labour data and disappointing manufacturing surveys added to concerns that major economies are losing momentum.
With the Federal Reserve’s final rate decision of the year, China’s trade data, and UK GDP all ahead, investors now face one of December’s most consequential macro weeks — one that could determine whether year-end sentiment stabilises or deteriorates further.
News
- Bond markets shocked early in the week:
JGB yields spiked to 20-year highs after BOJ Governor Ueda delivered unexpectedly hawkish commentary. The yen swung sharply, while PM Sanae Takaichi’s spending plans raised fears of a potential “Truss shock” given Japan’s debt profile. The move set a global tone, pushing investors to focus heavily on yield movements.
- AI-sector wobble midweek:
Reports that Microsoft enterprise clients were delaying adoption of new AI products rattled AI-linked equities before being publicly denied by the company. The narrative intensified as Google’s new Gemini launched and DeepSeek advances pressured OpenAI to re-align strategy.
- Macro data disappointed globally:
China’s manufacturing PMI slipped back into contraction, while both Europe and the US remained below 50. Weakness in global demand pressured equities early in the week before hopes of future easing provided support. The US ADP report showed the largest job losses since 2020, reinforcing the view that both growth and labour momentum are deteriorating. - Geopolitical tension hit energy markets:
Russia showed no willingness to engage with Washington’s latest peace proposal, while the Trump administration escalated pressure on Venezuela by blocking flights and issuing an ultimatum for President Maduro to resign.
- Fed expectations shifted dovish:
Markets now price roughly a 90% chance of a rate cut at next Wednesday’s FOMC meeting.
Price Action
- USD underperformed, weighed down by soft data and rising expectations of a dovish Fed shift. The biggest movers were the commodity currency pairs AUD/USD and USD/CAD.
- AUD outperformed, supported by RBA Governor Michelle Bullock’s emphasis on rising inflation pressures and an economy running above potential.
- Gold and silver have paused near recent highs as bulls second guess the strength of the rebound.
- Crude oil gained, reacting to geopolitical tensions and evidence of slowing OPEC output.
Market Themes to Watch
Fed to Cut and Pause
The Fed is widely expected to cut rates at the December 10 meeting, completing the three-cut roadmap projected earlier in 2025. Attention now turns to:
- Dot-plot adjustments for 2026
- Whether January becomes a pause (75% likely)
- Stable policy could help gold establish support near $4,160/oz and position for new record highs.
RBA and BoC Expected to Hold
- RBA: A hawkish tone could drive AUDUSD higher
- BoC: Weak Canadian growth may prompt a more dovish message
UK GDP (Oct): Flat Growth Expected
Markets look for 0.0% growth, an improvement from the prior –0.1%.
Top Events in the Week Ahead
- Fed rate decision (Wed)
- China trade data (Mon)
- Japan Tankan index (Mon)
- Australia NAB confidence (Tue)
- US JOLTS (Tue)
- China CPI (Wed)
- US trade balance (Thu)
- China new yuan loans (Fri)
Corporate Updates This Week
Toll Brothers, AutoZone, Oracle, Adobe, Broadcom, Costco, British American Tobacco, TUI.
Technical Analysis
We look at hundreds of charts each week and present you with three of our favourite setups and signals.
EUR/USD
Setup
Sideways range - bullish reversal
- 1.15 has held as range support
- Bullish breakout from weekly inside bar
- Inverse Head & Shoulders completed pattern on daily chart
- Daily RSI back at 60 after avoiding oversold (uptrend)
Commentary
The euro has shown renewed upside momentum after failing to sustain bearish created by the pin bar at 1.19. While signals are less reliable without a trend in place, a rally to the top of the range looks likely.
Strategy
- Buy pullbacks towards the neckline above 1.16
- Buy on daily close above 1.17
USD/JPY
Setup
Uptrend Correction
- Inside bar breakdown on weekly chart. A 1:1 RR would target 154, a 2:1 would target 152.50)
- Long term resistance at 158
- Daily price action still above the 50 SMA (bullish) and 50 RSI (bullish)
Commentary
After hitting long term resistance, price broke a steep uptrend line but remains above the 50 SMA. Despite a heavy USD sell off in other pairs, USD/JPY held up quite well, indicating underlying strength.
Strategy
- Bull another dip to 154
- Buy breakout over 156
Nikkei 225 (225/JPY)
Setup
Bullish - correction
- Two week rebound after three week decline.
- Very over-extended weekly uptrend has struggled since hitting big 50K level
- Price still above uptrend line and 50 RSI
- Correction from ATH has rebounded 61.8%
Commentary
The Nikkei is still in an uptrend but could be about to undergo another leg lower as part of a bigger ABC correction. A 2:1 RR on a weekly inside day trade would target 46,000 but this trade would be stopped out above 51,500 - signalling a continuation of the uptrend.
Strategy
- Buy breakout above 51,500
- Sell breakdown from 50,600
But - as always - that’s just how the team and I are seeing things, what do you think?
Share your ideas with us OR send us a request!
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Disclaimer:
The communication does not constitute investment or trading advice, nor does it include any recommendations. Additionally, it does not serve as an offer or solicitation to engage in transactions involving financial instruments. WeTrade does not take responsibility for any actions taken based on the information provided, nor for any outcomes that may occur as a result of the actions taken.
