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In 2026, China showed continued government support to boost growth despite external challenges, according to reports.

China has announced plans for a more active fiscal policy in 2026 to support its economy amid external challenges. The Ministry of Finance intends to boost investment in areas like advanced manufacturing, technology, and workforce development. This decision follows a fiscal policy meeting that set the agenda for the upcoming year. The AUD/USD pair saw a slight increase of 0.02%, trading at 0.6716. Key factors influencing the Australian Dollar (AUD) include the interest rates set by the Reserve Bank of Australia (RBA) and iron ore prices, which are vital since iron ore is Australia’s top export. Additionally, China’s economy plays a significant role as it is Australia’s largest trading partner.

The Role Of Reserve Bank Of Australia

The Reserve Bank of Australia influences the AUD by changing interest rates to keep inflation between 2-3%. Higher interest rates typically support the AUD, while lower rates have the opposite effect. The RBA’s quantitative measures can also impact the currency’s value. China’s economic health greatly affects the AUD. Strong growth in China usually increases demand for Australian exports, therefore boosting the AUD. Since iron ore prices are crucial for the AUD’s strength, increases in these prices generally lead to a stronger AUD. A positive trade balance, driven by higher export demand, also supports the AUD. As of December 29, 2025, China’s commitment to ongoing fiscal support in 2026 is an important development for the new year. This proactive approach indicates that Beijing is focused on stabilizing its economy, which is good news for its main trading partners. We should consider positioning for a stronger Australian dollar in the coming weeks. This stimulus is essential, especially since China’s economy has shown some mixed signals lately. For example, the official manufacturing PMI for November 2025 was at 49.0, indicating ongoing challenges in the sector. This new fiscal initiative aims to address that weakness and stabilize growth going into 2026.

Impact Of Chinese Economic Policies

This situation directly boosts the demand for industrial commodities, particularly iron ore. Recently, iron ore prices have surged to around $138 per ton, marking a significant increase from earlier this year. China’s commitment to increasing investment in manufacturing and infrastructure should help maintain these prices, benefiting Australian export revenues. Support for the AUD comes at a time when the Reserve Bank of Australia is maintaining a hawkish approach. With inflation in Australia holding steady at 5.2% in the third quarter of 2025, the RBA has kept its cash rate at 4.10%. This relatively high interest rate enhances the currency’s appeal. Given this context, we should consider bullish positions using derivatives, such as buying AUD/USD call options with expirations in late January or February 2026. Current market volatility is low, making option premiums attractively priced for potential gains. This strategy allows us to benefit from a stronger Australian dollar while clearly managing our risk. Looking ahead, it’s important to keep an eye on the details of China’s spending plans as they are revealed. Confirmation of significant investments in heavy industry would further support this optimistic outlook. Conversely, any uncertainty in Beijing’s commitment or a sharp fall in commodity prices would prompt a reassessment of our position. Create your live VT Markets account and start trading now.

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In December’s meeting, BoJ members stated that policy rates are still significantly below neutral levels.

The Bank of Japan (BoJ) released its Summary of Opinions from the December monetary policy meeting. One member pointed out that the policy rate is deeply negative, even with recent hikes, and emphasized the importance of tracking economic effects. Another member supported consistent rate increases to mitigate potential risks. It was highlighted that Japan has the lowest real policy rate globally, and rate hikes could influence inflation through foreign exchange markets. A member cautioned that having real rates that diverge from equilibrium can disrupt resource allocation and economic growth. Government stimulus is expected to boost economic growth over the next year or two, and real wages might rise in the first half of next year. The Cabinet Office confirmed that the BoJ’s decisions aim for stable price targets, advising vigilance regarding capital spending and corporate profits.

Impact on USD/JPY Exchange Rate

Following the BoJ’s report, the USD/JPY fell by 0.28% to 156.06. The upcoming BoJ report, due on December 28, will include inflation and growth forecasts. Before the report, the USD/JPY showed little movement, with possible changes from the Fed influencing the US Dollar. Key support levels for USD/JPY include the December 26 low of 155.96, with possible drops to 155.44 from December 19, and 154.51 from December 17. The Bank of Japan’s December meeting summary reveals a clear shift toward a more hawkish stance, indicating additional interest rate hikes in 2026. The belief that the current policy rate is “far below neutral” strongly suggests that the BoJ plans to continue tightening monetary policies, marking a significant change from the very loose policies of the past leading into 2024. This view is supported by recent economic data showing Japan’s core inflation for November 2025 at 2.8%, above the bank’s 2% target. The outlook for the 2026 “Shunto” wage negotiations is encouraging, with early projections indicating pay increases could exceed 4%. This could boost consumer spending and allow the BoJ to act more decisively. The expected rise in real wages may finally provide the bank with the opportunity it has been waiting for.

Comparison with United States Monetary Policy

Japan’s policy direction contrasts with the United States, where the Federal Reserve has paused its tightening cycle, and markets are anticipating two rate cuts by mid-2026. This narrowing interest rate gap between the U.S. and Japan, which previously weakened the Yen, might soon reverse. We believe this difference in central bank policies will primarily drive downward pressure on the USD/JPY exchange rate. Given this outlook, it’s wise to consider positioning for a stronger Yen in the coming weeks. One straightforward strategy is to buy USD/JPY put options, which would benefit from a decline in the pair while limiting potential losses to the premium paid. As the BoJ’s policies become more active, we anticipate increased currency volatility, making such long-volatility positions potentially more effective. For those focused on generating income, selling out-of-the-money call spreads on USD/JPY is also appealing. This method profits from a declining or stable currency pair and leverages higher option premiums stemming from increased uncertainty. Aiming for a short strike price near the recent resistance level of 157.70 could offer a favorable balance of risk and reward. Create your live VT Markets account and start trading now.

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The euro strengthens above 1.1750 due to expectations of a Federal Reserve rate cut.

In the early Asian session, the EUR/USD pair is trading around 1.1775. This move is supported by expectations that the US Federal Reserve will cut rates again in the future. Meanwhile, there’s little expectation for a European Central Bank (ECB) rate cut until early 2026, keeping the Euro strong against the US Dollar. In December, the Federal Reserve cut the federal funds rate by 25 basis points, bringing it to a target range of 3.50%-3.75%. So far in 2025, they’ve reduced rates by a total of 75 basis points. The possibility of more cuts next year is putting downward pressure on the US dollar.

Potential New Fed Chair

A new Federal Reserve Chair who is expected to have a dovish stance could further weaken the US dollar. In contrast, the ECB has kept its rates steady and takes a careful, data-driven approach to future rate changes. Money markets show a low chance of a 25 basis point rate cut by the ECB by February 2026. Current signs suggest that the ECB’s rate-cutting cycle might soon come to an end, which could boost the Euro’s position. Trade balance figures and economic indicators like GDP and employment data are essential in determining the Euro’s strength. A robust economy and a positive trade balance typically support the Euro against other currencies. With the EUR/USD trading firmly above 1.1750, this signals ongoing weakness in the US Dollar as we approach the new year. This trend stems from the belief that the Federal Reserve will continue cutting interest rates in early 2026. The differences in monetary policy—a dovish Fed versus a cautious ECB—are key factors in supporting the Euro.

US Market Trends and Predictions

Looking back at 2025, the Fed implemented 75 basis points in cuts as the US labor market showed signs of slowing down. Recent data backs this up: the November Non-Farm Payrolls report revealed job growth of only 130,000, with the unemployment rate rising to 4.1%. This slowdown, along with Core PCE inflation decreasing to 2.9%, gives the Fed good reason to maintain an easing policy in the months ahead. In contrast, conditions in Europe are different, helping to strengthen the Euro. The latest Eurozone Harmonized Index of Consumer Prices (HICP) for November 2025 was still high at 3.2%, well above the ECB’s target. This supports the idea that there’s only a slim chance of an ECB rate cut in February, affirming the central bank’s steady approach. For traders, this suggests a strategy of buying EUR/USD call options to take advantage of the expected upward movement with limited risk. With Fed actions expected in the first quarter, options that expire in March 2026 could be well-placed to benefit from the differences in policy. The anticipated nomination of a new Fed Chair in May 2026 adds to expectations for a politically influenced, low-rate environment for the dollar. This scenario resembles what we saw in the mid-2010s, when ECB easing against a tightening Fed led to a significant drop in the Euro. Now, the roles are reversed, which could support a sustained rally for the EUR/USD pair. We’ll pay close attention to today’s US Pending Home Sales data for any potential shifts in this outlook. Create your live VT Markets account and start trading now.

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Clients were informed about the stagnation and limited upside of the S&P 500 before the market opened.

On Friday, the S&P 500 and Nasdaq were relatively stable, following recent rallies before Christmas. The S&P 500 was above its mid-December peak, while the Nasdaq needed further improvement. NVDA had a strong performance due to news about chip tariffs, benefiting other companies like MU and AVGO as well. After a dip to $475, TSLA’s chart appears promising, similar to GOOGL’s recent movements. Focus is turning towards seasonal trends and early January patterns, with volatility indicators remaining steady.

Market Position End of Year

Gold and silver saw gains, while oil prices were impacted by hopes for peace in Eastern Europe and worries about Venezuela. Bitcoin’s future remains unclear, especially concerning the Nasdaq’s potential impact. As we approach December 29, 2025, the market has already shared much of its holiday momentum. The classic Santa Claus Rally, which historically leads to a positive S&P 500 return about 77% of the time in the last week of the year, seems to have already occurred in the days before Christmas. Currently, we can expect a narrow trading range as the S&P 500 solidifies its position above the mid-December peak. The recent halt on new chip tariffs has greatly benefited the tech sector, particularly semiconductors. This has positively impacted companies with strong earnings, like Micron (MU), and helped Broadcom (AVGO) bounce back. The PHLX Semiconductor Index (SOX) has outperformed the S&P 500 by nearly 5% this month, a trend we anticipate will continue into early 2026. Dips in strong growth stocks are quickly being bought up, signaling optimism for derivative traders. Tesla’s recent drop to $475 created a clear buying opportunity that led to a surge in call options, similar to the interest in Google earlier this quarter. This suggests that traders should be prepared to use options to take advantage of short-term weaknesses in leading stocks.

January Effect

As we look ahead to the first two weeks of January, we expect the “January Effect” to unfold, possibly benefiting stocks that lagged last year. With the VIX currently low around 13, it indicates a calm market that may favor bullish strategies. This situation could be perfect for selling puts or setting up call spreads on indices with growth potential, like the Nasdaq 100. In commodities, gold and silver continue to rise as the Federal Reserve has indicated it will pause rate hikes into the new year. Oil prices are trapped in a range as traders consider peace prospects in Eastern Europe against the risk of rising conflict in Venezuela affecting supply. This situation leaves oil options trading with high implied volatility, presenting chances for premium sellers. Bitcoin’s connection to the Nasdaq has become less consistent, leading to unique trading opportunities. While the tech index has been stable, Bitcoin has surged past $115,000, showing independent strength not seen since early 2024. Traders might explore this divergence as a pairs trading opportunity, using derivatives to speculate whether the gap between them will widen or close. Create your live VT Markets account and start trading now.

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Bloomin’ Brands shows signs of stability in casual dining after a 45% decline this year

Bloomin’ Brands, Inc. (BLMN) operates in the casual dining sector, owning well-known chains like Outback Steakhouse and Carrabba’s Italian Grill. Although the company has steady revenue, its stock has dropped over 25% since August. This decline is due to tighter profit margins and fewer customers, along with lowered annual earnings forecasts. On December 11th, 2025, BLMN’s stock moved above a long-term downward trendline that started in November 2024, signaling a possible recovery. Currently, the stock is testing this trendline again, but we should proceed with caution. End-of-year tax-loss selling could hinder progress. Important technical levels to watch are $6.21 and the November low of $5.90, which are essential for any potential reversals. Resistance levels are at $7.86 and $8.50. If these are exceeded, the stock might rally towards $11.00. With a 45% drop this year, a strong recovery could be on the horizon if trends support it. Given the retest of the trendline, we should consider January call options to take advantage of a possible rally. The stock is oversold, making this a good entry point for a bullish position. Since the stock is near its lows, options premiums currently present a favorable risk-to-reward situation for a rebound. Recently, there has been a significant rise in open interest for January and February call options, particularly at the $7.50 and $8.00 strike prices. This indicates that other traders expect a price increase after the new year. Moreover, implied volatility has decreased from its recent peak, making these call options more affordable than a few weeks ago. This trading strategy aligns with recent economic data. A report on consumer spending revealed that the casual dining sector performed better than expected, with only a 0.5% decline compared to the anticipated 2% drop. Additionally, wholesale food prices, especially for beef, have fallen by 3% since October 2025, which could alleviate some margin pressures. However, the main risk is if the stock fails to hold at this retest. We must closely monitor the $6.21 and $5.90 support levels. If the stock falls below the November low of $5.90, that could invalidate our bullish outlook, suggesting we might need to buy puts or exit long positions. These levels should guide our stop-loss strategies for bullish trades. We saw a similar trend in the restaurant industry after the downturn in 2022. Stocks that weathered tax-loss selling in December often rallied strongly in the first quarter of the following year. Once the selling pressure from tax-loss harvesting eases in January, technical setups like this generally have a higher chance of success.

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Crude oil approaches a crucial trendline, with a potential 50% increase if it breaks through

Crude oil is currently testing a resistance trendline at $59 per barrel. If it breaks through this point, it could potentially rise by 50% in the first half of 2026. The oil market is gaining attention as funds are likely to move from metals to oil. In 2025, we saw big increases in gold, silver, platinum, and palladium, while natural gas jumped 100% before stabilizing. Institutional buying is expected to fuel the next rise in oil prices.

Concerns About Oil Oversupply

Worries about oversupply in the oil market are still present, but the U.S. rig count is steadily decreasing. This trend indicates that American producers are cutting back on production. Overall, oil appears to be a strong trading option for the first half of 2026. As crude oil approaches the key $59 per barrel trendline, we should prepare for a potential breakout in early 2026. It’s wise to position ourselves for a rise rather than wait for confirmation, as a clear break could happen quickly. Increased price fluctuations around this level make options strategies appealing for managing risk and taking advantage of a possible jump. A simple strategy is to buy call options with expirations in March or April 2026, allowing time for the trade to develop. Choosing strike prices just above the resistance, like the $60 or $62.50 calls, allows for a straightforward bet on the expected breakout. This approach sets our maximum risk to the premium paid while offering considerable upside potential.

Supply Data and Market Tightness

The case for a breakout is supported by supply data that challenges the oversupply story. The latest Baker Hughes report shows the U.S. rig count falling to 585, its lowest in the fourth quarter of 2025. With fewer active rigs, we expect lower production in the coming months, tightening the market more than many anticipate. Moreover, recent inventory reports suggest that demand is stronger than expected. The Energy Information Administration (EIA) reported a surprising draw of over 3 million barrels last week, indicating that consumption is beginning to outpace bearish supply predictions as we head into the new year. In 2025, there was significant capital movement into metals, with gold exceeding $2,400 and silver nearing the $30 mark. As these trades mature, institutional investors are on the lookout for the next undervalued asset, and oil fits that bill. This situation is reminiscent of the consolidation seen in late 2021 before oil’s major rally in 2022. For a more cautious approach, a bull call spread can lower the initial entry cost. For instance, one might buy the March 2026 $60 call while selling the March 2026 $70 call. This creates a less expensive position that can profit from a price increase, although it limits maximum potential gains. Create your live VT Markets account and start trading now.

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Affirm Holdings is at a crucial point after a steady rise along its trendline this year.

Affirm Holdings (AFRM) has been climbing this year, thanks to a strong daily support trend line. The chart shows that the stock is at a crucial point, where it could either keep growing or pull back, with clear resistance levels above. The main support trend line started from the spring lows and has supported several pivot lows since then, highlighting resistance. Buyers have defended this level, preventing any breakdowns and ensuring higher lows. As long as AFRM stays above this line, it will likely continue to trend upward. However, falling below it could indicate a change in momentum. Above the current price, a resistance level exists in the high-$70s, which is a major obstacle for further growth. Recent attempts to rally have failed here due to an imbalance between demand and supply. Tight candle patterns suggest a struggle between buyers and sellers. Traders see this area as crucial. If the stock resistance holds, we could see a downturn, but breaking through it may attract more buyers. Beyond that, there are further resistance levels in the low-$90s and near $100. The low-$90s might encourage profit-taking, while the ~$100 mark is significant psychologically. This chart offers a clear strategy with points to enter and reassess at each confirmed level. AFRM’s uptrend is encountering resistance, but it is also supported by a historically strong trendline. Keep an eye out for signals that will help define the stock’s future direction. Affirm is steadily moving higher along a key support line but is approaching a major resistance zone in the high-$70s. Recent data indicates that “Buy Now, Pay Later” usage surged over 15% during the 2025 holiday shopping season, helping boost the stock. This situation creates a critical choice for traders as we enter the new year. For those optimistic about the trend, buying call options or bull call spreads with strike prices above $80 could be a way to capitalize on a possible breakout through this resistance. A strong close above the high-$70s, especially on high volume, would signal that sellers in this area have been overcome. This could lead to a quick move toward the next resistance level in the low-$90s. On the other hand, recent government reports indicate a slight rise in 30-day delinquencies on unsecured loans, making us cautious about the high-$70s resistance. A sharp rejection from this level might be an opportunity to buy put options or consider bear put spreads, targeting a move back to the rising support line. The stock’s history of volatility, particularly the major drop in 2022, reminds us that market sentiment can shift quickly. The rising trendline is crucial for managing risk on long positions. If AFRM closes above this line daily, any pullbacks toward it could be seen as buying opportunities. However, a clean break below it would jeopardize the uptrend and could trigger a wave of stop-loss orders. Should a breakout occur, the low-$90s and the psychologically important $100 level are logical points to take profits. Implied volatility is likely to rise as the stock nears these key levels, making options more expensive but also creating opportunities to sell covered calls against a stock position. How the stock performs around the $100 mark will indicate whether this is merely a rally or the start of a new, higher valuation range.

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Key pivots support daily and intraday structure as Nasdaq futures near upper levels

Nasdaq March futures recently closed above micro level 1 at 25,794 after reclaiming the central pivot of 25,405 on December 19. This gain is part of an upward shift covering over 300 points. Currently, futures face a challenge at the descending resistance around micro level 2 at 26,036, which is critical for confirming a move into the upper structure.

Market Focus Changes

The market’s focus has shifted from recovery to sustaining momentum within its current structure. Important daily levels include the support at 25,794, resistance at 26,036, and the pivotal pivot at 25,405, which is important if the market drops. These key points guide the broader framework and are useful for long-term positioning. Looking at the 15-minute chart, the higher rotation from micro level 4 at 24,924 has maintained momentum above the central pivot of 25,514. Micro level 1 at 25,739 has held as support, promoting further upward movement. However, the intraday structure remains two-sided. Important intraday levels involve staying above the central pivot and watching the 25,739–25,879 zone for potential gains. If prices fall below 25,514, attention will shift to lower levels. As we approach the end of 2025, Nasdaq futures are testing a crucial area. The market has moved into the upper half of its recent range but is hesitant near the 26,036 resistance level. This comes after the Federal Reserve’s mid-December meeting, which maintained interest rates but indicated the inflation fight is ongoing. For traders hoping to see an uptrend, it’s essential that prices stay above the 25,794 support level. A sustained move above the significant resistance at 26,036 would confirm higher prices and suggest a strong start to 2026. This would mean the market has processed recent economic data and is still poised for growth.

Resistance and Market Reactions

This hesitation is understandable, given that November 2025 Core CPI data came in at 3.1%, slightly above the 3.0% consensus. This persistent inflation is why the resistance around 26,036 is challenging to break. It leads traders to take profits rather than push for more gains before year-end. Conversely, if the market fails to hold above 25,794, it would indicate weakness. Attention would then shift to the central pivot at 25,405, signaling the market may not be ready to continue rising. A break of this support level would present opportunities for short-term sellers, suggesting a rotational environment. While we’ve seen significant year-end rallies before, like the one that closed 2023, current price movements feel more cautious. The gains since the lows in October 2025 have been substantial, and now the market is testing whether it can maintain that momentum. Lower trading volumes during the holiday week could lead to sharp shifts on little news. Therefore, the immediate focus should be on price action around the intraday pivot of 25,514. Holding above this level keeps the bullish structure intact, while a drop below would favor sellers in the short term. This is not the time for big predictions, but for responding to how the market behaves at these key levels. Create your live VT Markets account and start trading now.

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Upper rotation structure of S&P 500 futures aligns with market responses over different timeframes

S&P 500 futures follow a clear structure, with prices closely tracking set levels across different timeframes. This was especially noticeable during times of low trading volume, highlighting its guiding influence. On December 22, the market activity around the 6,921 central pivot established the short-term direction. The trend continued as futures stayed above this pivot, forming the upper structure before moving higher.

Price Alignment with Structure

Recent updates show that the index remains in sync with its structural framework. By December 24, prices successfully moved through the Micro-1 to Micro-5 sequence (6,937–6,974), completing the upper part of the two-way structure. This movement aligns with the existing structure, rather than being an acceleration, with trading volume being less significant. As the upper rotation is finished, future price movements will depend on how they react to upcoming reference levels. The S&P 500 futures illustrate how structure affects prices across various timeframes. By maintaining the 6,921 pivot and moving through micro levels, it proves that these levels are set before prices reach them. The focus is now on observing how prices respond to structural guides. The S&P 500 futures have completed their upper rotation, defined by staying above the 6,921 pivot before the holiday. This move concluded the sequence at 6,974, even with fewer traders involved. The current structure suggests a pause or a potential new expansion phase ahead.

Market and Technical Outlook

This technical situation is backed by recent core PCE inflation data, which showed a slight decrease to 2.7% for November 2025. With the cash index just below the 7,000 mark, this data could help push prices higher. It’s important to watch immediate price movements in the coming days. We are entering a traditionally strong time for stocks, often called the Santa Claus rally. Historically, the last trading days of December and the first two of January tend to show an upward trend about 77% of the time. For options traders, this seasonal boost is significant, as implied volatility usually drops in a quiet, rising market. Looking ahead, the broader market focus is on the Federal Reserve’s plans for 2026. Futures markets currently indicate a greater than 70% chance of a rate cut by the second quarter, following a solid November jobs report that wasn’t too hot. This environment may encourage buying on dips, providing support if the market seeks to rebalance below recent highs. The immediate focus is now on the recent high at 6,974 and the old pivot at 6,921. A strong move above the highs would signal further growth, while a drop back to the pivot suggests a rebalancing process. The key is to monitor price reactions at these levels rather than trying to predict what will happen. Create your live VT Markets account and start trading now.

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Monthly BOJ report may impact USD/JPY through economic growth and inflation projections

The Bank of Japan (BOJ) will share its Summary of Opinions on Sunday at 23:50 GMT. This report, released about 10 days after the Monetary Policy Statement, forecasts inflation and economic growth. It is published eight times a year. The USD/JPY remains steady as investors wait for the BOJ’s Summary of Opinions. Talks about a possible new Federal Reserve Chair, who might lower rates next year, could influence the US Dollar’s value against the Japanese Yen.

USDJPY Resistance and Support Levels

For the USD/JPY pair, the first resistance level is the December 9 high at 156.95. This is followed by the December 22 high at 157.70, and the November 20 high at 157.89. On the downside, support begins with the December 26 low of 155.96. If prices drop further, they might reach the December 19 low at 155.44 and the December 17 low at 154.51. The Bank of Japan, which shapes Japan’s monetary policy, aims for an inflation rate of about 2%. Since 2013, the BOJ has used Quantitative and Qualitative Easing and introduced negative interest rates in 2016. While this helped the economy, it weakened the Yen, especially in 2022 and 2023. In 2024, the BOJ began to move away from this policy due to rising inflation linked to a weaker Yen and higher energy prices. As we approach the Bank of Japan’s Summary of Opinions tonight, USD/JPY is trading in a narrow range, indicating the market is waiting for an important event. This low-activity period lets traders prepare for the expected volatility that usually follows key releases. The focus will be on any changes regarding inflation and future policy adjustments. We’re looking for hints that the BOJ is worried about ongoing price increases, especially since Japan’s core CPI for November 2025 was a solid 2.7%. If the summary suggests a hawkish stance, it could lead to a faster policy shift than the market expects. This would likely strengthen the yen and challenge the initial support level at 155.96.

Market Outlook and Trading Strategies

Meanwhile, uncertainty around the new Federal Reserve Chair is putting pressure on the dollar. If a more dovish chair replaces Jerome Powell, along with U.S. core PCE cooling to 2.5%, expectations for rate cuts in 2026 have grown. This difference between a tightening BOJ and a potentially easing Fed points to a bearish outlook for USD/JPY in the long term. For traders using derivatives, the high implied volatility on weekly options expiring this Friday suggests a significant price move ahead. A long straddle or strangle strategy could be a good choice for trading the breakout, regardless of its direction. This approach allows profits from strong moves without needing to guess the exact path. For those with a specific outlook, buying puts on USD/JPY may be a way to prepare for a hawkish BOJ report, aiming for support levels at 155.44 and 154.51. Conversely, if the BOJ appears cautious about growth, call options targeting the 156.95 resistance could provide value. Having a clear risk-reward ratio is essential during such key events. We remember the market response to the October 2025 policy statement, which saw the pair move over 200 pips within 24 hours. With the significant shift away from ultra-loose policy that started in March 2024, these meetings now hold considerable importance. Being unprepared for an unexpected price movement could be costly. Create your live VT Markets account and start trading now.

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