USD/CAD’s rejection at 1.4150 leads to a sharp reversal, indicating possible further decline, analysts say
The USD/CAD pair has hit resistance near the trendline at 1.4150, causing a sharp reversal. It has fallen below the rising channel and the 200-day moving average, indicating that it could decline further.
A brief rebound may happen, but if the pair doesn’t rise back above the 200-day moving average around 1.3910, it could drop more. The next targets to watch are the September lows at 1.3770/1.3725 and then 1.3660.
The FXStreet Insights Team, made up of journalists and analysts, gathers information from specialists. They provide insights but do not give trading or investing advice.
This information is for general purposes only and should not be seen as specific investment guidance. Readers should check data independently before trading. There are risks of financial losses and emotional distress involved.
After failing to overcome the resistance near 1.4150, USD/CAD has experienced a significant pullback. The pair has now slipped below its 200-day moving average, which is an important signal for traders. This suggests that the recent uptrend has lost steam, and a bigger correction may be starting.
The Federal Reserve is likely to cut rates this week, especially since last week’s US CPI showed inflation dropping to 2.9%. In contrast, the Bank of Canada is expected to maintain steady rates, aided by a surprisingly strong Canadian jobs report that added 45,000 jobs in November. This growing gap in policy favors the Canadian dollar over the US dollar.
For derivative traders, this situation suggests strategies that profit from a declining USD/CAD. We recommend buying put options with strike prices near the September lows of 1.3770, as we anticipate the pair will test these levels in the coming weeks. If the pair cannot rise above 1.3910, it would strengthen this bearish outlook.
This situation mirrors what we saw in 2023 when the Bank of Canada paused its rate hikes before the Fed, leading to a stronger loonie. Additionally, the overall weakness in the US dollar, which has caused EUR/USD to approach 1.1650, further supports our view. This isn’t just a story about the CAD; it’s also about a weak dollar.
Despite market declines, Dow Inc. (DOW) outperforms S&P 500 with a 1.09% rise
Dow Inc. closed at $23.11, reflecting a 1.09% increase, which is better than the S&P 500’s loss of 0.09%. During the same trading day, the Dow index fell by 0.38%, while the Nasdaq saw a slight rise of 0.13%.
In the last month, Dow Inc.’s shares climbed 3.44%. This is below the Basic Materials sector’s growth of 3.88% but higher than the S&P 500’s 1.89% increase. Investors are eagerly awaiting Dow Inc.’s upcoming earnings report, which is expected to show revenue of $9.53 billion, down 8.45% from the same quarter last year.
Annual Forecasts and Analyst Estimates
Analysts forecast Dow Inc. will have earnings of -$0.99 per share and revenue of $40.03 billion. These figures represent declines of 157.89% and 6.82%, respectively, from last year. Changes in analyst expectations are critical for understanding current business trends, with upward revisions often suggesting a positive outlook. The Zacks Rank system rates stocks from #1 (Strong Buy) to #5 (Strong Sell) and has a solid track record. Stocks rated #1 have averaged annual returns of +25% since 1988. Recently, the consensus EPS estimate for Dow Inc. increased by 0.55%, giving it a Zacks Rank of #3 (Hold). The recent performance indicates that Dow Inc. has been doing better than the broader market on both daily and monthly scales. DOW’s shares are more resilient than the S&P 500, even though they have not kept pace with its sector. This stability hints at some support for the stock price ahead of the earnings release. However, the upcoming earnings report poses a significant risk, with expectations of a major decline. We forecast a revenue drop of over 8% compared to last year and a full-year net loss per share. This stark year-over-year comparison serves as the main bearish signal for traders. Despite the gloomy annual forecast, there has been a slight upward adjustment in earnings estimates over the last 30 days, showing some recent optimism among analysts. Traders should see this as a mixed signal that could lead to volatility around the earnings announcement.Broader Economic Factors
Examining the larger economy, the drop in oil prices during the fourth quarter of 2025 has eased input costs for chemical companies. This trend may be contributing to the minor positive estimate revisions. However, this cost relief may not adequately counter weak demand. Global demand continues to be a worry, as global manufacturing PMIs have struggled to remain above the 50-point expansion mark for much of 2025. Economic signals from China remain mixed, adding uncertainty to the demand for basic materials. This weak demand supports the forecast of declining annual revenue. High interest rates, a result of inflation in 2023, continue to dampen new construction and industrial projects. This environment of short-term stock momentum contradicting poor fundamental forecasts is suitable for volatility-driven strategies, such as straddles or strangles. It contrasts sharply with the post-pandemic housing boom of 2022, where material demand was soaring. It’s important to note that DOW operates in an industry currently ranked in the bottom 13% of all sectors we monitor. This indicates that the challenges facing the company are industry-wide and not unique to it. This weak sector backdrop supports a cautious or bearish approach to any directional trades. Create your live VT Markets account and start trading now.Italian industrial output declined by 1%, missing the expected 0.3% increase.
Italy’s industrial output dropped by 1% in October, worse than the expected decrease of 0.3%. This larger decline raises concerns for economic forecasts.
The foreign exchange market is influenced by central bank policies. The Federal Reserve is expected to lower interest rates, while the Bank of Canada plans to keep rates unchanged.
Currency Movements
In currency movements, the Pound Sterling has increased in value against the US Dollar. At the same time, the USD/JPY remains strong around 157.00. Gold trading is uncertain, largely depending on the Federal Reserve’s decisions. Investors are closely watching for any policy changes. Forex brokers are introducing new options, which are valuable for budget-conscious traders and those from various regions. As brokers adapt, updated best practices and regulations offer guidance for potential investments. Italy’s recent industrial output report showed a 1% drop for October, which is worse than the 0.3% decrease that was expected. This trend raises worries for the Eurozone. We observed similar weaknesses in last week’s German factory orders that also fell short of expectations, indicating a deeper slowdown across the region. This leads us to be cautious about the Euro’s strength, even though it’s currently performing well. Everyone is focused on the upcoming Federal Reserve meeting, where a rate cut is widely expected. This expectation increased after the November Non-Farm Payrolls report revealed only 110,000 new jobs, far below the anticipated 180,000. However, with increasing disagreement among Fed officials, any sign of caution from the Fed could cause significant market shifts.Trading Strategies
For derivative traders, this situation may create profit opportunities with the EUR/USD, now around 1.1650. With weak economic data from Europe, the Euro’s current strength seems largely dependent on the anticipated Fed rate cut. We recommend using options strategies, like buying puts on the EUR/USD, to prepare for a possible pullback if the Fed does not meet market expectations. On the other hand, the Pound Sterling remains strong against the US Dollar, staying above 1.3300. The most recent inflation rate in the UK for November was stubbornly at 3.4%, limiting the Bank of England’s ability to cut rates as aggressively as the Fed can. This difference suggests that buying dips in GBP/USD could be a solid strategy in the near future. Gold is performing well around $4,200 per ounce, serving as a safe haven amidst economic uncertainty and benefiting from anticipated lower interest rates. We’ve seen similar gold price movements during the Fed’s easing cycles after the 2008 financial crisis and the 2020 pandemic response. We believe that using call options to stay long on gold while managing risk is a smart move. Meanwhile, the USD/JPY pair is steady near 157.00, largely due to the ongoing weakness of the Japanese Yen as the Bank of Japan continues its loose monetary policy. This creates a complex situation where a dovish Fed should weaken the pair, yet the Yen’s weakness offers some support. This makes trading in this pair risky, so traders should consider options to guard against sharp price movements following the Fed’s announcement. Create your live VT Markets account and start trading now.Analysts suggest the New Zealand dollar will range between 0.5760 and 0.5790.
The New Zealand Dollar (NZD) is expected to stay between 0.5760 and 0.5790. Current analysis shows that the chances of the NZD rising above 0.5800 are decreasing.
In the last 24 hours, the NZD traded between 0.5769 and 0.5795, ending with a small change of +0.05%. There isn’t much momentum in either direction, suggesting continued consolidation within the 0.5760 to 0.5790 range.
Looking at the next 1-3 weeks, we expected the NZD to rise since late last month, with important levels at 0.5800 and 0.5835. Even though it reached a high of 0.5795, the lack of upward momentum and overbought conditions make it less likely to go beyond 0.5800. If it drops below 0.5750, it may signal that the NZD’s upward trend has ended.
The Insights Team at FXStreet has gathered these observations from commercial notes and insights from various analysts.
We believe the recent rise in NZD/USD is losing steam, particularly near the 0.5800 level. Last week’s comments from the Reserve Bank of New Zealand were cautious, especially after the GDP growth for the third quarter of 2025 came in lower than expected at 0.2%. This indicates the New Zealand economy may be slowing down quicker than anticipated.
In contrast, the US economy shows strength, with last Friday’s job report revealing over 210,000 new jobs created in November. All eyes are now on the Federal Reserve’s meeting next week, where this strong data could lead to a more aggressive approach, boosting the US dollar. The differences between the two central banks’ outlooks are becoming clearer.
For those expecting a downturn, buying put options with a strike price at or just below the 0.5750 support level could be wise. If this level is breached, it would likely confirm the end of the recent uptrend and trigger a quicker decline. This method allows you to position for potential weakness with defined risk.
On the other hand, if we think the pair will stay range-bound, selling options could work well. An iron condor strategy, with short strikes outside the 0.5760 to 0.5790 range, would benefit from low volatility and time decay. This aligns with our view that the pair will consolidate until it makes its next major move.
We’ve seen similar patterns before, especially in the fourth quarter of 2023 when the pair struggled to break through key resistance levels. At that time, a combination of slowing New Zealand economic momentum and strong US data led to a significant downturn. The current overbought conditions remind us of that period.
Experts observe that traders expected Fed rate cuts and tight supply, leading silver to surpass $60.
Silver has surged above $60 per ounce, setting a new record. This increase is driven by expectations of Federal Reserve interest rate cuts and concerns about reduced supply. Historically, silver performs better than gold when interest rates drop, which has fueled its rise.
Prices for silver have jumped over 110% this year, outpacing gold’s gains. The market is responding to potential future U.S. tariffs on silver after it was labeled a critical mineral by the Geological Survey.
The amount of silver mined has decreased by about 3% this year. This drop is due to declining ore grades and a lack of new mining projects. Looking ahead to 2026, silver prices are expected to remain strong because of high industrial demand, limited supply growth, and a better economic environment.
Silver has recently cracked the $60 per ounce mark, a significant milestone fueled by tight supply and the anticipation of Federal Reserve rate cuts. This upward momentum has been building throughout the year, with silver up over 110% since January 2025. Traders focusing on derivatives should take note of this strong trend.
With the upcoming Federal Open Market Committee (FOMC) meeting next week, it would be wise to prepare for further price increases by considering call options. The CME FedWatch Tool indicates that markets expect over a 90% chance of an initial rate cut, which tends to benefit silver more than gold. A similar pattern happened during the 2019 easing cycle, where silver prices rose rapidly after the Fed’s first cut.
However, given the large gains this year, we should be cautious about a possible short-term drop. The CBOE Silver Volatility Index (VXSLV) has reached multi-year highs, making long call options costly. Instead, traders might think about selling out-of-the-money put options to take advantage of high premiums, betting that any fall in price will be slight.
We are also keeping an eye on supply factors, which suggest support for prices going into 2026. Recent Q3 2025 production reports from major mining companies show a trend of declining ore grades. The designation of silver as a critical mineral in the U.S. raises the chance of future tariffs. This supply shortage indicates that maintaining longer-term bullish positions could be a rewarding strategy.
UOB Group analysts suggest the Australian dollar may hit 0.6660 before pulling back
In the next 1-3 weeks, recent trends suggest that the Australian Dollar (AUD) may be reaching its limits. Although it hit a new high of 0.6655, the momentum did not increase significantly. This analysis remains valid unless the price drops below the strong support level of 0.6590, which would change the current outlook for the AUD.
Alternative Strategies for Limited Gains
With the Australian Dollar’s upward momentum fading, we should explore strategies that benefit from modest gains. The potential test of 0.6660 may provide a brief opportunity for profit, but major resistance at 0.6685 appears sturdy for now. One way to generate income is by selling call options with a strike price at or above 0.6685, betting on the likelihood that a significant breakout won’t occur in the coming weeks. This cautious view is backed by recent data. China’s latest manufacturing PMI came in at a modest 50.4, signaling that the demand for Australian commodities is not very strong right now. Additionally, the Reserve Bank of Australia’s meeting minutes from early December 2025 indicated a growing conversation around pausing rate hikes, making future AUD gains less likely.Factors Influencing AUD/USD
On the other side, the US dollar is holding strong, thanks to a better-than-expected Non-Farm Payrolls report last Friday. This bolstered the Federal Reserve’s resolve to keep interest rates stable. We also saw the price of iron ore, a vital Australian export, drop slightly to $115 per tonne after failing to surpass its November 2025 highs. These elements present challenges for the AUD/USD exchange rate. Looking back to late 2023, we noticed a similar trend when the AUD/USD stalled around the 0.6800 level, proving that momentum often weakens at key resistance points. While the potential for immediate gains seems limited, the overall bullish trend remains as long as the price stays above the solid support at 0.6590. Traders might also consider selling put spreads with a strike price below 0.6590 to take advantage of stable prices and passing time. Create your live VT Markets account and start trading now.Traders anticipate the Fed’s decision as gold maintains sideways movement just below this week’s peak
Gold is currently trading within a narrow range as traders await results from the Federal Open Market Committee (FOMC) meeting. The anticipated interest rate cuts from the Federal Reserve have weakened the US Dollar, providing some support for gold prices. The metal is hovering near its weekly high, influenced by ongoing economic policies and global tensions.
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### The Fed’s Monetary Policy
The US Federal Reserve is likely to announce a 25 basis point interest rate cut, even with rising inflation pressures. According to the PCE Price Index, inflation was above the Fed’s 2% target for September. However, factors like slow job growth may help ease inflation in the coming months. The US Job Openings report indicated that job vacancies rose to 7.67 million in October, suggesting a strong labor market.
Gold is trading in a familiar range around $4,200. If prices rise above this level, they could reach $4,278 or even $4,300. On the other hand, if prices drop, buyers may step in around $4,165, but a fall below this level might lead to a drop toward $4,115—an important level for traders keeping an eye on the Fed.
Gold is in a holding pattern as we await the Federal Reserve’s decision later today, December 10, 2025. A 25 basis point rate cut is widely expected, which is keeping the US Dollar weak and supporting gold. The key moments will come during Jerome Powell’s press conference and the Fed’s future guidance.
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### Fed’s Rate Cut and Economic Outlook
We expect this rate cut despite persistent inflation from earlier this autumn. The Fed appears more focused on signs of slowing economic growth and a weakening labor market. This indicates they are prepared to act preemptively to prevent a sharper downturn in 2026.
Recent data backs this view and lends credibility to a more dovish stance. The November Consumer Price Index (CPI) showed headline inflation easing to 2.8%, while the latest job report revealed payroll growth of only 155,000, falling short of expectations. This stands in contrast to the strong job openings data from a few months ago, signaling that the labor market may be losing momentum.
For derivative traders, the uncertainty leading up to the announcement suggests using options to manage potential volatility. A long straddle—buying both a call and a put option with the same strike price around $4,220—could be effective. This strategy benefits from significant price movements in either direction once the Fed’s path becomes clearer.
After Powell speaks, it will be essential to monitor key technical levels for confirmation before using futures contracts. A sustained break above the $4,250 resistance level would signal a bullish trend, targeting $4,300. Conversely, a clear move below the $4,165 support could trigger short positions.
This situation is reminiscent of 2019 when the Fed began an “insurance” cutting cycle due to global growth concerns, even with a stable domestic economy. Following that trend, this could be the first of multiple cuts designed to ensure a smooth economic landing. Such actions may create lasting support for gold prices as we head into the new year.
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Brent crude drops below $62 as global oil market oversupply worsens
Oil prices are under pressure, with ICE Brent falling below $62 per barrel, the lowest level since late October. The oil market is moving towards a predicted surplus, with more price pressure expected by 2026. The situation with Russian oil supply is uncertain; although export volumes are high, finding buyers for these barrels is challenging.
Challenges in Russian Oil Supply
There is a clear need for larger discounts on Urals oil to attract buyers and avoid dealing with sanctioned entities. If Russia cannot find buyers, oil output may begin to drop. However, Russia has managed to bypass sanctions and other challenges since 2022. Recent data from the American Petroleum Institute showed a drop of 4.8 million barrels in US crude oil inventories, much larger than the 1.3 million-barrel decline that traders expected. In the refined products sector, stocks increased significantly, with gasoline inventories up by 7 million barrels and distillate inventories rising by 1 million barrels. The EIA predicts that US crude oil production will reach 13.61 million barrels per day in 2025. However, this is expected to dip to 13.53 million barrels per day in 2026, down from a previous estimate of 13.58 million barrels per day due to low prices and less drilling activity. With ICE Brent now under $62 a barrel, it’s clear that the market believes in an oil surplus. This downward trend is likely to last into early 2026, creating chances for traders to take bearish positions. Traders may want to consider buying put options or creating bear call spreads on near-term contracts to take advantage of this outlook. US data presents a mixed but ultimately negative view on demand. Although crude inventories fell more than expected, the significant 7 million barrel increase in gasoline stocks raises concerns about consumption. US gasoline demand in November 2025 is nearly 3% lower than during the same period last year, indicating that refiner margins, or crack spreads, may weaken further in the upcoming weeks.Global Demand and Economic Slowdown
Globally, the cautious outlook is supported by uncertainty around Russian supply. While we believe Russia will continue to redirect its oil as it has since 2022, slowing manufacturing in major markets like China, where the PMI has struggled to stay above the 50-point mark for months, dampens demand expectations. This overall economic softness strengthens the idea that supply will likely exceed consumption. The EIA’s forecast for record US production of 13.61 million barrels per day in 2025 adds to the current oversupply, despite expectations of a slight decline next year. This longer-term view suggests that today’s low prices may not last forever, making it wise to adopt defined-risk strategies. Utilizing put spreads on early 2026 contracts can help us profit from the current decline while limiting our exposure if the market begins to price in future production cuts. Create your live VT Markets account and start trading now.The Euro faces slight downward pressure and may reach 1.1600, but a break seems unlikely.
The Euro (EUR) is facing some downward pressure and may test the 1.1600 level, but analysts do not expect it to drop below that point. They anticipate that EUR will trade between 1.1580 and 1.1685 for the longer term, as the rise seen last month has ended.
In the past 24 hours, the EUR closed 0.09% lower at 1.1625, moving within a more limited range than expected. Even with a slight increase in downward force, a drop below 1.1600 or the strong support at 1.1580 is unlikely. The resistance level is at 1.1640, and if it breaks 1.1660, this could suggest a reduction in the mild downward trend.
Looking ahead to the next 1-3 weeks, the outlook for EUR has shifted. The upward momentum has slowed, especially after EUR hit 1.1615 recently. Although the strong support level remains intact, the decreased momentum indicates that EUR is likely to move within the range of 1.1580 to 1.1685, rather than continuing to rise.
It appears that the Euro’s recent surge has lost momentum. Over the coming weeks, instead of expecting a significant breakout, we should prepare for it to trade sideways. The crucial range to monitor is from 1.1580 on the low end to 1.1685 on the high end.
This perspective is backed by recent communications from central banks. Last week, the European Central Bank kept rates steady and indicated a “wait-and-see” approach after Eurostat’s latest flash estimate showed that November inflation eased slightly to 2.1%. This reduces the urgency for a more aggressive policy that would boost the Euro.
On the other hand, recent U.S. data does not indicate a strong dollar either. The latest Non-Farm Payrolls report from last Friday showed an increase of 185,000 jobs—healthy, but not strong enough to push the Federal Reserve towards a more aggressive stance. This balanced situation between the two economies helps maintain the currency pair within a defined range.
Given the expected lower volatility, selling options could be a wise strategy. We might consider setting up iron condors or short straddles with strikes beyond the expected 1.1580-1.1685 range to collect premiums as the currency pair moves sideways into year-end. The Cboe EuroCurrency Volatility Index has been hovering near its yearly lows, indicating that the market believes significant movements are unlikely.
However, we need to stay cautious, as low-volatility periods can end suddenly, just like the sharp market shifts seen in 2023. A break below the 1.1580 support or above the 1.1685 resistance would signal that this range-bound outlook is no longer valid. Therefore, strict stop-losses on any range-based positions are essential to manage risk.
Industrial production in Austria increased by 3.3% year-on-year, in contrast to a decline of 1.7%.
Austria’s industrial production rose by 3.3% year-on-year in September, reversing a previous decline of 1.7%. This increase shows a positive shift in the country’s industrial activity.
The Bank of Canada is likely to keep its interest rate steady at 2.25% after cutting rates by a quarter-point in previous months. The central bank’s monetary policy is being closely monitored.
