EUR/USD might rise towards a two-month high of 1.1804, driven by positive momentum. The 14-day Relative Strength Index sits at 62.11, indicating good upward strength without being overbought. The pair is testing support at the nine-day EMA of 1.1713. Currently, EUR/USD is weak, trading around 1.1720 during the Asian session on Friday. Technical analysis shows a bullish trend on the daily chart, as the pair remains within an upward channel pattern. It is above the nine- and 50-day EMAs, suggesting that the bullish trend is still strong.

Possible EUR/USD Increase

There’s a chance for EUR/USD to reach 1.1804, and possibly even 1.1850. If the support holds, we could see movement towards the 50-day EMA at 1.1644 or hit a three-week low of 1.1589 noted on December 1. Today, the Euro’s performance varies against other major currencies, showing particular weakness against the US Dollar. The heat map below illustrates percentage changes among major currencies, with the left column as the base currency and the top row as the quote currency. This analysis is enhanced by AI tools and market insights. Since EUR/USD is testing a crucial support level near 1.1713, this could be a good opportunity to consider long positions. The pair remains in a clear upward channel, showing that the underlying trend is still positive despite four days of weakness. This suggests the current dip may just be a temporary pause before moving higher. We might look into buying call options with strike prices around 1.1800, perhaps with an expiry in late January 2026, to take advantage of a potential rebound. This bullish outlook is supported by recent data, which showed Eurozone inflation for November 2025 at 2.7%, slightly above expectations, pressuring the European Central Bank to hold off on rate cuts. We recall a similar situation in late 2023, where persistent inflation helped the Euro against a weakening dollar.

Risk Management and Key Levels

If there’s a rebound from the current 1.1700 support area, it will strengthen our bullish view, with an initial target being the recent high of 1.1804. A break above this could move the pair toward the upper channel boundary near 1.1850 in early 2026. The Relative Strength Index at 62.11 demonstrates healthy momentum, with more room to grow before becoming overbought. However, we need to manage our risk if the 1.1700 support fails. This could happen if US economic data, like upcoming December 2025 retail sales figures, come in stronger than expected. A decisive close below the upward channel would suggest we should hedge long positions or start speculative shorts by buying put options. If the 1.1700 support breaks, the next important level to watch would be the 50-day EMA at 1.1644. A drop to this level would indicate a major shift in short-term market sentiment and could bring the three-week low of 1.1589 back into consideration for bearish strategies. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

The EUR/GBP remains close to 0.8750 as the Bank of England (BoE) lowers rates while the European Central Bank (ECB) keeps theirs steady. The BoE’s rate cut of 25 basis points brings the main interest rate down to 3.75%. This move aligns with market expectations after UK inflation decreased recently. Analysts predict another rate cut might happen in early 2026 due to economic trends. On the other hand, the ECB’s decision to maintain its policy rate meets market expectations. ECB President Christine Lagarde stated that rates will stay unchanged for a long time. Their latest forecast shows stronger economic growth, with inflation expected to reach 2% by 2028, after remaining below this level for the next two years.

Impact of BoE and ECB Policies on Currency

The BoE targets a stable inflation rate of 2% by adjusting base lending rates, which directly affects the value of the Pound Sterling. When rates go up, it usually strengthens the currency by attracting more investment. In contrast, lower rates can negatively impact the currency. In extreme situations, the BoE may use Quantitative Easing to increase credit flow and stimulate the economy, which often weakens the pound. Conversely, Quantitative Tightening, used when inflation rises, typically strengthens the currency. There is a clear division between the Bank of England, which has just cut its rate to 3.75%, and the European Central Bank, which has decided to hold steady. This difference is largely due to recent data showing UK inflation dropped to 2.8% in November 2025, compared to Eurozone inflation at 3.1%. This fundamental difference suggests that the Pound may weaken against the Euro. Given this situation, purchasing call options on the EUR/GBP with expirations in January or February 2026 seems like a smart move in the coming weeks. This strategy allows us to benefit from potential gains in the currency pair while limiting our risk to the premium paid for the options. We believe targeting strike prices around 0.8850 is a good plan, anticipating movement toward the next resistance level.

Market Sentiment and Strategy

This scenario is similar to what occurred after the 2016 Brexit referendum, when a policy divide led to a significant rally in EUR/GBP. All attention is now on today’s UK retail sales figures; a weak report would support the view of a slowing UK economy and likely push the pair higher. Failing to meet the expected -0.4% decline for November would strengthen our long positions. Current market conditions seem ripe for entry, as implied volatility for EUR/GBP options is close to its 12-month low of 5.5%, making options relatively inexpensive. The market has absorbed the shock from the central bank news, providing a chance to prepare for the next move. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Micron Technology reported strong earnings for the first quarter of its fiscal year, causing its stock price to jump by 13%. So far this year, Micron’s stock has risen by 202%, even as many AI stocks have struggled. This growth is due to its solid valuation metrics, with low P/E and PEG ratios indicating further growth potential. The company reported record revenue of $13.64 billion for the quarter ending November 27, up 56% from last year and surpassing expectations. Its net income reached $5.2 billion, reflecting a remarkable 175% year-over-year increase. Micron’s gross margin increased to 56%, a rise from 38.4% last year. A significant driver of this growth was its cloud memory unit, which saw revenue skyrocket by 99% to $5.3 billion. This unit supplies AI memory chips to major companies like Microsoft, Amazon, and Google. For the second fiscal quarter, Micron anticipates revenue of $18.7 billion, a 37% increase from Q1. The gross margin is expected to rise to 66%, with earnings projected at $8.19 per share. Micron credits its success to technological leadership, a wide range of products, and effective operations. After the strong 13% increase in stock price following earnings, implied volatility in Micron options has likely dropped. This situation offers a cleaner opportunity for trades over the next few weeks without the high costs typical before earnings reports. It’s an excellent time to consider bullish trades based on the company’s impressive future outlook. Given the expected 37% revenue growth next quarter, purchasing call options set to expire in February or March 2026 could be a smart move. This would allow time for the market to fully absorb the expected earnings potential indicated by the $8.19 EPS target. Longer-dated options help avoid rapid time decay and still capture the anticipated upward movement. For those with a more cautious perspective, selling cash-secured puts at strike prices below the current market level is another appealing strategy. With a forward P/E of just 11, we believe there is solid support for Micron’s valuation, making it a strong trade for collecting premium. Alternatively, a bull call spread can limit risks while still taking advantage of the clear upward trend. Recent industry data support this positive outlook, showing that the high-bandwidth memory (HBM) market is projected to grow by over 150% by 2026. Data center construction, crucial for cloud memory, is also on the rise, with spending increasing nearly 20% year-over-year, according to the latest reports from November 2025. This reinforces that the demand Micron is experiencing is part of a larger, sustainable trend. We have seen similar cycles before, especially during the semiconductor boom of 2020-2021, when strong demand led to significant and sustained stock price increases. While the semiconductor index (SOX) has risen by 65% this year, Micron’s 202% increase clearly sets it apart as a leader. History shows that leaders often continue to outperform their peers for several quarters. As we approach the end of the year, trading volume may decrease during the holidays, potentially leading to price stability or a gradual upward trend. This environment is suited for strategies that profit from time decay, such as selling puts or covered calls. However, given the strong growth forecast, caution is advised against limiting upside potential with covered calls unless the premium is exceptionally appealing.

here to set up a live account on VT Markets now

EUR/CAD has climbed to around 1.6160 as the Euro gains strength. This increase follows the European Central Bank’s decision to keep interest rates steady, highlighting a data-focused approach for the future. In the early European trading session on Friday, the EUR/CAD pair neared 1.6160, buoyed by the Euro’s rally. Traders are looking for insights from European Central Bank officials to gauge future interest rate changes.

Economic Forecasts

On Thursday, the ECB confirmed its Deposit Facility Rate at 2% due to uncertainties around inflation. GDP growth forecasts have risen to 1.4% for this year and 1.2% for 2026, driven by anticipated investments. The Canadian Dollar has stabilized after recent gains, with expectations that the Bank of Canada will not cut interest rates soon. This decision is influenced by inflation near the 2% target and improving job market conditions. The Bank of Canada kept rates at 2.25%, noting that economic slack should help ease trade-cost pressures. The spotlight now turns to the Canadian Retail Sales data for October, set to be released at 13:30 GMT, which is expected to show no change after a 0.7% decline in September. Retail Sales, reported monthly by Statistics Canada, reflect the total value of goods sold by retailers. Changes in these sales figures can indicate consumer spending trends across Canada.

Potential Market Impact

As EUR/CAD approaches 1.6160, we’re seeing levels not consistently reached since 2020. This high position suggests that while the Euro is strong, the pair may react sharply to any shifts in central bank sentiment. Traders in derivatives should be wary of a possible reversal from these multi-year peaks. The European Central Bank is holding its rate at 2.0%, and today’s remarks from its officials will be closely monitored for any hawkish signals. With the Eurozone’s Harmonised Index of Consumer Prices for November 2025 at 2.3%, slightly over the target, any commentary suggesting persistent inflation could strengthen the Euro further. This makes near-term call options on the Euro an attractive strategy to potentially capitalize on upside movement. Conversely, the Bank of Canada remains steady at 2.25%, backed by an inflation rate around 2.5% and a healthy labor market, as shown by the November 2025 jobs report with unemployment at 5.5%. This robustness in the Canadian economy has prevented the BoC from indicating any cuts to rates, resulting in a narrow interest rate gap between the two currencies, making data releases very impactful. The immediate focus will be on the Canadian Retail Sales data for October 2025, expected to show no growth. If the actual figures turn out negative, indicating a slowdown in consumer spending, we could see the Canadian Dollar weaken, pushing EUR/CAD above the 1.6200 level. Traders may opt for options strategies like straddles to take advantage of the expected volatility around this data release, regardless of the direction. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Consumer confidence in the Netherlands hit -21 in December, signaling worries about the economy. This figure highlights how consumers feel about economic conditions. The US Dollar Index rose above 98.50 ahead of the University of Michigan survey data. At the same time, the NZD/USD pair fell close to 0.5750, despite positive GDP numbers for New Zealand not helping the Kiwi dollar.

GBP/JPY Hits New Highs

The GBP/JPY pair reached new highs above 209.00 due to strong upward momentum. In contrast, UK retail sales dropped by 0.1% in November, while a 0.4% increase was expected. The Japanese Yen continues to weaken after comments from Bank of Japan Governor Ueda. Meanwhile, the EUR/USD pair dipped towards 1.1700 as demand for the US dollar increased. The GBP/USD remains steady below 1.3400 as traders digest updates from the Bank of England and recent US inflation data. Gold prices have remained low, trading below $4,350, even with mixed US CPI data suggesting cooling inflation pressures. Bitcoin, Ethereum, and Ripple are seeing ongoing corrections, influenced by the Bank of Japan’s recent rate decision affecting market sentiment. The Bank of England’s recent rate cut to 3.75% shows a hawkish approach, slightly supporting the sterling. The growing issues with Ethereum are prompting the EF to propose various solutions to address potential centralization risks.

Dutch Consumer Confidence and Eurozone Weakness

The Dutch consumer confidence figure of -21 for December highlights a troubling trend in the Eurozone. We’ve seen similar weakness in recent data, like the November S&P Global Eurozone Composite PMI, which showed a contraction at 48.2. This suggests any rallies in European equities may be brief, making put options on indices like the Euro Stoxx 50 a smart hedging strategy in the coming weeks. This weakness in Europe contrasts with the more stable US economy, driving the US Dollar Index above 98.50. The November Non-Farm Payrolls report showed a solid gain of 195,000 jobs, supporting the Federal Reserve’s decision to keep rates steady while others are cutting. We believe that trading USD call options or bull call spreads is a clear strategy to position for continued dollar strength against weaker currencies. The impact of this divide is evident in the EUR/USD pair, which is moving closer to 1.1700. Given the ongoing negative sentiment from Europe, we see this as the easiest path going into the new year. Traders may consider buying put options on the Euro to profit from possible declines. Meanwhile, the GBP/JPY reaching fresh highs above 209.00 reflects interest rate differences rather than UK economic strength. With the Bank of England’s rate at 3.75% after its recent cut and the Bank of Japan’s rate still near zero, traders are borrowing cheap Yen to invest in higher-yielding Sterling. However, this crowded trade is vulnerable, so we recommend using long-dated call options to maintain exposure while limiting potential losses. The decline in cryptocurrencies, alongside a hawkish stance from the Bank of Japan, suggests a broader risk-averse mood in the market. As we near the end of the year, a time known for thin liquidity, this nervousness could lead to increased volatility. We believe buying VIX futures or call options is a wise way to protect portfolios from sudden market changes. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Dear Client,

As part of our commitment to provide the most reliable service to our clients, there will be maintenance this weekend.

Maintenance Details:

Please note that the following aspects might be affected during the maintenance:
1. The price quote and trading management will be temporarily disabled during the maintenance. You will not be able to open new positions, close open positions, or make any adjustments to the trades.
2. There might be a gap between the original price and the price after maintenance. The gaps between Pending Orders, Stop Loss, and Take Profit will be filled at the market price once the maintenance is completed. It is suggested that you manage the account properly.
3. During the maintenance period, VT Markets APP will not be available. It is recommended that you avoid using it during the maintenance.

The above data is for reference only. Please refer to the MT4/MT5 software for the specific maintenance completion and marketing opening time.

Thank you for your patience and understanding about this important initiative.

If you’d like more information, please don’t hesitate to contact [email protected]

The Bank of Japan lifted its policy rate to 0.75% on Friday, marking a decisive step away from its long-standing ultra-accommodative stance.

Although the move had been largely priced in, markets interpreted the hike as a vote of confidence in Japan’s economic momentum, particularly with core inflation steady at 3.0% and export data beating expectations.

In a somewhat counterintuitive response, the yen softened slightly after the announcement. Attention instead shifted to Governor Kazuo Ueda’s remarks, which suggested the eventual terminal rate could fall anywhere between 1.0% and 2.5%.

This guidance has prompted investors to reconsider the outlook for policy tightening, with growing speculation that the BOJ may deliver more than a single rate increase in 2026.

Technology Shares Drive Nikkei Gains

Friday’s rally was led by technology names, with chip equipment maker Advantest climbing 1.59% and robotics specialist Fanuc rising 2.68%. The move tracked ongoing strength in the Nasdaq, which continues to benefit from AI-related optimism and easing US inflation pressures.

A surprise drop in US core CPI to 2.7% further boosted global risk appetite, even as Federal Reserve officials maintained a cautious tone on the timing and pace of rate cuts.

Positive sentiment across the global tech sector also lifted Asian markets more broadly. Equity indices in Taiwan and South Korea both advanced by more than 1%, while Japan’s Topix index edged 0.05% higher.

Technical Analysis

The Nikkei 225 is consolidating around 49,511, up 0.56% on the session. Despite a loss of momentum since peaking at 52,669 in November, the broader bullish structure remains intact.

Prices continue to trade comfortably above longer-term support levels, while the 30-day moving average is still sloping higher, indicating that buyers remain in control of the trend.

However, the MACD is showing early signs of bearish divergence, with weakening histogram bars and the MACD line slipping below its signal line.

The index has largely moved sideways throughout December, and a decisive break above the 50,000 mark may be required to reignite upside momentum.

On the downside, a sustained move below the 47,000–46,500 zone could open the door to a deeper correction into early 2026. For now, traders are likely to remain patient as the market tests the boundaries of its current range.

Bottom Line

What was once viewed as a potential headwind, a BOJ rate hike, is now being interpreted as a signal of orderly policy normalisation rather than economic stress.

With technology stocks providing strong leadership and the Nasdaq offering supportive global cues, the Nikkei appears well placed heading into year-end, particularly if the BOJ’s tightening cycle remains measured.

Open your live VT Markets account and start trading today.

The US Dollar Index (DXY) is on the rise, reaching about 98.55 during early European trading on a Friday. This increase happens even though the US inflation rate, shown by the Consumer Price Index (CPI), was weaker than expected at 2.7% in November, falling short of the predicted 3.1%. The USD is gaining strength in a cautious market. However, this upward movement might hit obstacles due to anticipated interest rate cuts by the Federal Reserve (Fed) in 2026, considering a slowing US labor market and low inflation.

Talk of Interest Rate Cuts

There’s growing speculation that the US central bank might lower interest rates sooner, which could affect the value of the US dollar. Currently, financial forecasts suggest only a 26.6% chance of a rate cut at the Fed’s next meeting in January. The US Dollar is a dominant currency worldwide, making up over 88% of international foreign exchange transactions. Fed decisions heavily impact the dollar’s value, with interest rate changes being a key way to manage monetary policy. The Fed also uses quantitative easing and tightening to support or lessen the dollar’s strength in different economic situations. We should view the dollar’s rise to 98.55 as a short-term event, likely influenced by year-end caution, rather than a shift in overall trends. The broader picture shows cooling inflation, which has been the main topic since the aggressive rate hikes of 2023-2024. This temporary strength might provide a good opportunity for positioning against renewed dollar weakness in the weeks ahead. The November inflation rate of 2.7% is a considerable drop from over 9% in mid-2022, showing that the Fed’s move towards cutting rates is warranted. With three rate cuts already in 2025, traders could consider strategies benefiting from a weaker dollar, such as buying put options on the US Dollar Index or selling dollar futures contracts set to expire in early 2026.

Currency Market Opportunities

This situation makes currencies like the Euro and British Pound appealing compared to the dollar. Looking back at late 2023, when expectations of Fed rate cuts for 2024 caused a similar exodus from the dollar into other major currencies, we see an opportunity. Using call options on EUR/USD or GBP/USD may effectively capitalize on their potential strength as we enter the new year. The market currently assigns only a 26.6% chance of a rate cut in January, which seems low given the weak inflation and labor market figures. This could mean traders are undervaluing the likelihood of the Fed acting quickly to support the economy, presenting an opportunity to position for a surprise that might hasten the dollar’s decline. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

USD/CHF is trading around 0.7950, recovering from losses earlier. The US Dollar is gaining strength as we await the release of the University of Michigan Consumer Sentiment Index. Recent US inflation data from November hints at possible Federal Reserve rate cuts, which could limit the Dollar’s rise. In November, the US Consumer Price Index (CPI) fell to 2.7%, lower than the expected 3.1%. Meanwhile, the core CPI increased by 2.6%, the slowest growth since 2021. President Trump expressed a desire for a Federal Reserve Chair who supports lower interest rates. Switzerland reported a trade surplus of CHF 3,841 million in November. Exports rose by 1.6% from the previous month, while imports dropped by 0.8%, primarily due to decreased purchases of chemicals and pharmaceuticals. The Swiss National Bank is unlikely to reintroduce negative interest rates, as this could negatively affect savers.

Swiss Franc and the Global Market

The Swiss Franc (CHF) is among the top ten traded currencies in the world and is viewed as a safe haven during market uncertainties, thanks to Switzerland’s stable economy. The Swiss National Bank meets every quarter and aims to keep inflation below 2%. Higher interest rates can boost the CHF, while economic data from Switzerland and the Eurozone impacts its value. Switzerland’s economy closely aligns with the Eurozone, with strong correlations between the Euro and Swiss Franc. Looking back to late last year, USD/CHF was near 0.7950, but a weaker US dollar has pushed it down. As of December 19, 2025, the rate is closer to 0.7700. This trend reflects the Federal Reserve’s actions this year, which included two 25-basis-point rate cuts due to slowing growth. The soft US inflation data from November 2024, with CPI at 2.7%, was an early indication of this shift. The US Core PCE, the Fed’s favored inflation measure, has been consistently under 2.5% for the last two quarters of 2025, confirming a lasting disinflationary trend and keeping pressure on the dollar. In contrast, the Swiss National Bank has maintained its policy rate throughout 2025, citing ongoing domestic inflation averaging 2.2% this year. The trade surplus from last November remains strong, with Swiss exports to the Eurozone increasing by 3% year-over-year, according to recent data. This difference in policy between a Fed that’s cutting rates and an SNB that’s holding steady should continue to support the Franc.

Investment Strategies Amidst Currency Trends

For derivative traders, this situation suggests it’s smart to position for further declines in USD/CHF. Buying Swiss Franc (CHF) call options or US Dollar (USD) put options with expiration dates in the first quarter of 2026 appears to offer a beneficial risk-reward ratio, allowing traders to take advantage of the expected trend. We should remember the market chaos when the SNB unexpectedly removed the euro peg in 2015. With one-month implied volatility for USD/CHF near multi-year lows of 4.5%, option premiums are currently low for hedging against sudden policy changes. A long straddle or strangle could be a wise choice to safeguard against unexpected movements during the next SNB meeting in March 2026. The Swiss Franc’s status as a safe haven has been significant this year, particularly with rising trade tensions in Asia and uncertainty ahead of next year’s French elections. These global risks reinforce the value of the Franc, regardless of central bank decisions. We believe these factors support a long position in CHF against USD in the weeks ahead. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now