Telus Corporation faces challenges at $12.99 as it struggles with resistance levels
Telus Corporation (TU) is experiencing a long decline, with shares now priced at $12.99, down 0.70% today. The stock’s downward trend started in late 2022 and continues to encounter various resistance levels. The trendline, which began at the peak of $22 in November 2022, has continuously rejected attempts to rally over the past two years.
Currently, there is a horizontal resistance level at $13.62. Despite several attempts to break through this point in late 2024, the stock has consistently retreated. The latest attempt on December 19 showed promise but was blocked by sellers, highlighting the difficulty of overcoming this resistance.
TU’s challenges are intensified by its dual resistance structure. To move past the $13.62 level and the descending trendline, the stock needs strong buying pressure and a fundamental market shift that hasn’t happened yet. If the price dips below $12.50, it could quickly fall towards $12.00 or $11.50.
For the stock to gain upward momentum, bulls need it to convincingly exceed $13.62 with significant trading volume. Only then can they aim for the tough descending trendline. Until a breakthrough occurs, TU’s stock is likely to remain within its current range.
As of December 30, 2025, Telus is trading at $12.99, showing a clear bearish setup due to ongoing technical weakness. The broader economic landscape supports this outlook, as the Bank of Canada has maintained interest rates above 4.5% for most of 2025. This high rate environment puts substantial pressure on capital-intensive companies like Telus, making it hard for these stocks to attract investment.
Those who believe the downtrend will continue might consider buying puts as a straightforward strategy. Given the strong resistance at $13.62 and the potential support level at $12.50, February or March 2026 puts with strikes of $12.00 or lower would be advisable. This allows time for the trade to unfold if technical support fails early in the new year.
This bearish view is supported by recent fundamental data. The Q3 2025 earnings report from November revealed that subscriber growth hit its lowest point since 2019, with competitors like Freedom Mobile aggressively capturing market share. Data from the Canadian Radio-television and Telecommunications Commission (CRTC) at the end of 2025 showed that major providers lost nearly 1% market share over the past year.
Another strategy is to sell the resistance using credit spreads. We could look into selling a January 2026 bear call spread, which involves selling $13.50 or $14.00 strike calls while buying a higher strike for safety. This trade takes advantage of time decay and the stock’s struggle to break through the established $13.62 resistance.
The source material indicates that the stock is likely to “chop,” suggesting that premium-selling strategies could work well. If implied volatility remains high due to the recent decline, an iron condor with short strikes around $12.00 and $14.00 could benefit from this range-bound movement. This strategy bets that Telus will stay between its key support and resistance levels until the January 2026 expiration.
We also need to consider the dividend, which now yields over 7%, a level not seen since the 2008 financial crisis. While this high yield might seem attractive, it often signals concerns about future cash flow and the sustainability of dividends—especially since the rate hikes that began in 2022 led to this extended decline.
For any speculative bulls, the strategy hinges on a clear breakout with high volume above $13.62. A cost-effective way to position for this unlikely scenario would be to buy far out-of-the-money calls, like the March 2026 $15 strike calls. This is a low-probability trade, treating a small investment like a lottery ticket for a sudden market shift.
Abercrombie & Fitch hits bull flag target, attracting dip buyers with momentum trading
Abercrombie & Fitch (ANF) has seen an impressive increase, with its stock price rising more than 100% since November 24. This climb mainly consisted of just six small dips.
On Monday, the stock hit the bull flag target of $130.33, a level predicted by a pattern developed in early December. After this jump, the stock seems overextended, suggesting it might either pull back or stabilize before reaching the next resistance at $143.54.
Profit-taking could create minor support around $122.72, with stronger support at $117.03. A critical point to watch is the older declining trendline near $110.00. Staying above this level is essential to keep the current momentum against short-term selling pressure.
The stock’s incredible 100% gain since late November 2025 reflects strong fundamentals and overall market confidence. This strength is backed by the company’s impressive Q3 2025 earnings report, showing a 15% increase in comparable sales. Now that the stock has reached the $130 target, we need to be careful as the rally appears to be stretched.
With the stock looking overextended, one strategy is to buy put options for late January or February 2026, targeting strike prices close to the $120 or $115 support levels. The VIX has been low around 13, making options relatively cheap for a bet on a short-term decline. A safer approach could be selling a bear call spread above the recent highs, which would profit if the stock simply stalls or drops from here.
For those who think the strong trend might continue, we should keep an eye on potential dips to support at $117.03 or the crucial trendline near $110.00. These levels offer a chance to sell bull put spreads, allowing us to collect a premium while anticipating that these key levels will hold into the new year. This strategy helps us manage risk while waiting for the stock to stabilize and prepare for its next upward move.
In the past, we’ve seen similar sharp rises in stocks, particularly tech stocks in 2023, often followed by a period of consolidation or a 15-20% drop. How ANF’s price reacts at the $117 and $110 levels will be crucial for deciding our next steps. These support zones will determine whether we see a simple profit-taking dip or a more significant trend reversal.
The Pound holds steady at 1.3460 as Fed minutes approach and BoE shows hesitation
The GBP/USD pair is currently trading around 1.3460, down by 0.30%. Although it reached a three-month high of about 1.3535 recently, it lost steam due to uncertainty ahead of the upcoming FOMC Minutes.
The Pound is stable near 1.3500 against the US Dollar, holding its ground as the US currency shows some weakness. This situation unfolds as we await the December FOMC Minutes during the New York trading session.
Early European Session
In the early European trading hours, GBP/USD climbed slightly to around 1.3510. The Bank of England’s plan for a gradual easing of monetary policy is giving the Pound support against the US Dollar. In other market activity, the Canadian Dollar remains flat, while the US Dollar is stronger amidst talks of potential rate cuts. The Dow Jones is down due to sector-specific issues. The EUR/USD pair continues to fall, and the NZD/USD is influenced by tensions in Taiwan and uncertainty over Fed policy. After the FOMC Minutes, the EUR/USD has dipped, while gold and Ethereum prices are steadier. Market attention is shifting to 2026 forecasts and Forex brokers for 2025. FXStreet shares insights without offering investment advice.Approaching The New Year
As we near the new year, the GBP/USD pair is holding steady near its three-month high of 1.3535, showing uncertainty before the Federal Reserve’s meeting minutes. The trading around 1.3500 creates a critical moment for traders. The market is currently calm but may soon react significantly to the Fed’s policy outlook for 2026. We’re keeping a close eye on the differences between the Fed and the Bank of England. Recent US inflation data from November 2025 showed a welcome decrease to 2.8%, raising expectations for a rate cut in early 2026. This has led to increased implied volatility for short-term GBP/USD options as traders prepare for a potential breakout if the Fed leans towards a dovish stance. Meanwhile, the Bank of England seems to be taking a more cautious approach to gradual easing, which supports the Pound for now. UK’s wage growth, reported at 4.5% for the third quarter of 2025, continues to be a concern and explains the BoE’s slower strategy compared to the Fed. This difference in expected rate cuts is key to how the currency pair will move in the upcoming weeks. We have seen similar situations in the past, like after the 2008 financial crisis, when differing timelines from central banks created strong trading trends. Traders may want to consider options strategies like bull call spreads to position themselves for a move above 1.3535. This strategy provides a defined way to profit if the Fed’s minutes indicate more aggressive easing than expected. After the FOMC minutes are released, we will quickly turn our attention to the first major economic data for 2026, specifically the January employment and inflation reports from both the US and the UK. These will be crucial in testing the central banks’ commitments. Derivative positions should stay adaptable to accommodate this new data. Create your live VT Markets account and start trading now.The GBP/USD remains steady at 1.3460 after retreating from last week’s peak of 1.3535.
The GBP/USD pair is trading at 1.3460, down 0.30%. Last week, it reached nearly 1.3535 but couldn’t hold those gains. This drop reflects caution among traders before the Federal Open Market Committee (FOMC) Minutes are released.
The US Dollar remains stable, with the Dollar Index around 98.10. Traders are eagerly waiting for details on the Federal Reserve’s future monetary policy. So far this year, the Fed has made three rate cuts, bringing the Federal Funds target range to 3.50%-3.75%.
Forecasts And Predictions
Predictions suggest a policy rate close to 3.4% by 2026, indicating only one more rate cut may happen. However, market tools estimate at least two more cuts by the end of 2026, showing differing expectations. The Pound Sterling is performing well against major currencies, benefitting from an environment where the Bank of England (BoE) is cautious about easing monetary policy. Recently, the BoE lowered its policy rate by 25 basis points to 3.75%. In the UK, inflation remained above the target at 3.2% in November. This prompts the BoE to be careful with its policy decisions. Future economic moves in the UK will likely focus on job market trends and GDP growth, with low job demand possibly affecting progress. With GBP/USD hovering around 1.3460, the market is awaiting a clear direction. The upcoming release of the Federal Reserve’s meeting minutes will be a key event that could clarify current uncertainties. This pause allows traders to prepare for the next steps in the new year.Market Tensions And Opportunities
There’s a key tension between the Fed’s guidance and market expectations. Although the Fed’s forecasts from early December 2025 indicate just one more rate cut in 2026, the CME FedWatch Tool shows traders believe there’s over a 70% chance of at least two cuts by the end of next year. This disagreement presents an opportunity since the upcoming minutes might prompt the market to swiftly adjust its views. This uncertainty suggests that volatility in the US Dollar could rise significantly in January 2026. History shows that during similar periods of disagreement among central banks, like late 2021 before the Fed started its rate hikes, there were often sharp price movements as new information came out. Therefore, it might be wise to consider options strategies that can benefit from big moves in GBP/USD, regardless of direction. On the other end of the pair, the Bank of England’s cautious stance provides support for the Pound. The latest data from the Office for National Statistics (ONS) for November 2025 shows UK inflation is still high at 3.2%, well above the 2% target. This puts limits on how aggressively the BoE can cut rates. The differing policies, with the Fed likely to loosen more than the BoE, should continue to favor strength for the GBP against the USD. Additionally, uncertainty for the dollar is heightened by the upcoming announcement of a new Federal Reserve Chair in January 2026. During President Trump’s first term, he favored a more supportive monetary policy. The market expects that the new Chair will share this view, which may weigh on the dollar throughout 2026. Create your live VT Markets account and start trading now.The Australian dollar rises against the US dollar due to a hawkish RBA and anticipation of a federal meeting.
The AUD/USD pair is currently trading above 0.6700, with the Australian Dollar showing a slight rebound. This increase is driven by expectations for a stricter monetary policy in Australia next year and the upcoming minutes from the Federal Reserve’s December meeting.
The Australian Dollar’s rise is based on the belief that the Reserve Bank of Australia may keep its strict policies longer than other central banks. This confidence is bolstered by an unclear inflation outlook, with the bank prepared to tighten its policies if necessary.
Dollar Stability in the US
In the US, the Dollar remains stable as traders await insights from the Federal Reserve minutes. The Fed cut interest rates by 25 basis points during the December meeting, now targeting a range of 3.50%-3.75%, with only one additional cut expected in 2026. Market focus is also on upcoming political developments in the US, particularly regarding the announcement of Jerome Powell’s successor as the Federal Reserve Chair. The Australian Dollar has shown the most significant percentage change against the British Pound, indicating strength. The table below highlights that the AUD rose by 0.33% against the GBP. Overall, global economic conditions and political decisions continue to shape currency values and economic forecasts.Central Bank Policy Divergence
The AUD/USD pair is holding steady near 0.6700, driven by a clear difference in central bank policies. The market believes that the Reserve Bank of Australia (RBA) will keep interest rates high into next year, while the US Federal Reserve (Fed) has already started cutting rates. This divergence is a key theme as we approach January 2026. The RBA’s firm approach is understandable given that inflation has been persistent. The latest quarterly CPI for Q3 2025 showed an inflation rate of 3.5%, significantly above the RBA’s target range of 2-3%, supporting their decision to maintain the cash rate at 4.35%. We will be looking closely at the upcoming Australian CPI data in January, as it could confirm or challenge this hawkish stance. Conversely, the Fed has eased its policies by cutting the key rate three times in 2025, now at a range of 3.50%-3.75%. This move reflects success in controlling US inflation, with the latest Core PCE reading for November 2025 showing a slowdown to 2.8%. Traders will carefully analyze the Fed meeting minutes for signs of whether the anticipated rate cut for 2026 represents a lower limit or an upper cap. The growing interest rate gap makes a long AUD/USD position attractive from a carry trade perspective. This means that holding the higher-yielding Australian Dollar against the lower-yielding US Dollar can result in positive returns. If upcoming data supports this policy divergence, this strategy is likely to gain popularity. Looking ahead, a significant factor for the US Dollar will be the expected announcement of a new Federal Reserve Chair in January. President Trump’s choice to replace Jerome Powell could significantly impact US monetary policy and create volatility in currency markets. As a result, we are factoring in higher premiums on options to cover this event risk. This situation is quite different from the synchronized interest rate hikes we saw in 2023. During that time, trading strategies were more straightforward. Now, understanding the unique economic trajectories of both countries is essential. We must stay alert to individual data releases from Australia and the US in the coming weeks. Create your live VT Markets account and start trading now.Chicago PMI for the United States reports 43.5, exceeding expectations of 39.5
The Chicago Purchasing Managers’ Index (PMI) for December was 43.5, which is better than the expected 39.5. This indicates that the manufacturing sector in the region is performing better than anticipated.
The PMI is an important measure of economic activity. A higher PMI means stronger manufacturing output. This improvement can affect various economic decisions and future market strategies.
Economic Implications
The December Chicago PMI report of 43.5 is much better than the predicted 39.5. Although this number still shows a decline in manufacturing, the unexpected increase suggests the economic slowdown may not be as bad as previously thought. This could lead to a reevaluation of concerns about a severe downturn. This information is especially relevant given the fourth quarter of 2025, which saw slow GDP growth and a rise in jobless claims over 240,000 per week in November. The market has been anticipating substantial cuts to the Federal Reserve’s interest rates early in 2026 due to this weakness. A stronger manufacturing report, even if it still indicates contraction, may lead us to adjust these expectations slightly. For those involved in trading equity derivatives, this could be a sign to lower downside protection for the near future. Selling some out-of-the-money puts on the S&P 500 set to expire in January could be a good way to earn some premium. The VIX index, which is around 21, is likely to decrease with this news, making it cheaper to buy long-term protection for later in the first quarter.Market Strategy Adjustments
Reflecting on the slowdown in 2023, there were several moments when regional data briefly improved before falling again. Therefore, it is wise to view this as just one data point rather than a confirmed turnaround. Hedging any new bullish positions with inexpensive VIX calls for February or March could be a smart strategy. In the interest rate markets, we might see a slight drop in short-term bond prices, which would push yields up. Traders may reduce their expectations for a 50-basis-point cut from the Fed in March, leaning more toward a 25-basis-point move instead. This could be reflected in adjustments to positions in SOFR futures, indicating a less aggressive approach. Create your live VT Markets account and start trading now.Société Générale: USD is overpriced compared to other currencies, facing emerging risks in GBP/AUD
Purchasing power parity reveals that the US Dollar (USD) is still overvalued compared to other major currencies, even though the Euro (EUR) has gained 14% this year, and the British Pound (GBP) and Australian Dollar (AUD) have risen by 8%. In contrast, the Chinese Yuan has increased by 4%. Back in 2008, the USD was undervalued against most currencies except the Yuan.
Attention is particularly focused on GBP/AUD due to interest rate differences, especially with the Bank of England expected to cut rates in 2026.
How Commodity Prices Affect Currencies
Commodity prices and pressure from Chinese authorities might influence currency positions, indicating limited potential for GBP/AUD. The FXStreet Insights Team offers expert analysis on market movements, currency trends, and economic indicators. Related topics include struggles in various sectors impacting the DOW, steady movements in EUR/USD, and trends in AUD/USD. Editors have noted how holiday market conditions are affecting GBP/USD and discussed recent changes in gold prices due to margin adjustments. Looking ahead to 2026, the economic environment may support positive performance after a volatile 2025 shaped by regulatory changes, digital assets, and technological growth. Readers are advised to conduct their own research before making financial decisions, as market investments involve risk. As we approach the end of 2025, the USD remains expensive against most currencies, according to purchasing power parity. Despite the euro rising 14% and the pound by 8% this year, the dollar’s premium persists. This long-term overvaluation suggests limited potential for further gains.The Impact of Inflation and Interest Rates
Recent data backs this outlook, with US inflation for November 2025 reported at 2.8%, leading the Federal Reserve to maintain its position for now. This strong inflation keeps the dollar’s high valuation intact but leaves it vulnerable as other economies’ conditions change. The GBP/AUD pair looks especially interesting in the coming weeks. It has approached the 2.00 level, largely due to higher UK interest rates. However, this support now seems fragile as we move into 2026. In the UK, inflation has decreased faster than expected, with the November 2025 figure dropping to 2.5%. This situation puts pressure on the Bank of England to cut rates early in the new year. Markets are anticipating at least two rate cuts before July 2026, which could weaken the pound. On the other hand, Australia’s economy shows stronger inflation trends, with commodity prices, like iron ore, providing support. Consequently, the Reserve Bank of Australia is expected to keep its rates steady longer than the Bank of England. This divergence in monetary policy should benefit the Australian dollar. For derivative traders, this setup suggests a strategy of shorting GBP/AUD in the upcoming weeks, taking advantage of the weakening 2-year rate differential between the UK and Australia. Additionally, buying put options on GBP/AUD could be a good way to profit from a potential decline as the market prices in expected rate cuts from the Bank of England. Create your live VT Markets account and start trading now.As the year ends, BNY’s economists notice that investors are reducing their exposure to the US equity market.
Investors are pulling back from US stocks, according to BNY economists. In 2025, US portfolio weightings dropped from 68% to just over 64%.
Europe had its best performance in late Q1 and early Q2. This improvement was due to moving away from the dollar after the ‘Liberation Day’ tariffs. European investments rose to over 11% of portfolios, but they have since decreased. Nonetheless, they remain higher than at the start of the year, indicating ongoing support for reinvesting in Europe.
Emerging Markets and FX Gains
While US and Eurozone markets finished the year lower, emerging markets gained strength. This trend is likely to continue into 2026. Although investments in these markets are lighter, it doesn’t mean a significant cut in investments in developed markets. However, FX gains might be limited because yield differences favor higher hedge ratios, and pressures on export competitiveness could limit appreciation. As large investors cut their US equity exposure from 68% to 64% of their portfolios, it might be wise to consider downside protection. Buying put options on the S&P 500 or Nasdaq 100 indices for February 2026 could help guard against a drop early in the year. This cautious approach is backed by the recent preliminary US Q4 GDP figures, which showed a growth of 1.9%, falling short of the 2.2% expected and raising concerns about a slowdown. This uncertainty is visible in the derivatives market, where the VIX rose to 17.5 after spending much of Q4 below 15. For traders who think the market may stay flat or decline, selling out-of-the-money call spreads on major US indices could be a good strategy for generating income. This aligns with the trend of investors using recent market strength as a chance to sell, as evidenced by $15 billion in net outflows from US stock ETFs this month. In Europe, where holdings have softened from Q2 highs, the initial excitement from the post-Liberation Day tariff shifts appears to be stabilizing. Although confidence has waned, holdings still sit above early 2025 levels, indicating a neutral stance rather than a bearish one. Implementing collar strategies—buying a protective put and selling a call against a long position—on European indices could help secure some of this year’s gains while sacrificing some upside.Emerging Markets Opportunities
The shift toward emerging markets offers a strong opportunity in the coming weeks, similar to the 2003-2007 period when a weaker dollar spurred a multi-year rally in these markets. With positioning still light, there’s room for ongoing momentum into early 2026. This perspective is supported by robust Manufacturing PMI data from countries like India, which recently recorded a figure of 58.5, while the US ISM index has struggled to stay above 50. We suggest considering long positions through call options on broad emerging market ETFs to take advantage of potential upside with controlled risk. Addressing currency risk is crucial, as yield differences still favor the dollar. Traders might want to hedge their currency exposure by shorting emerging market currency futures against their long equity positions to isolate their focus on stock performance. Create your live VT Markets account and start trading now.US housing price index exceeds expectations with a 0.4% increase instead of 0.1%
In October, the U.S. Housing Price Index increased by 0.4%, much higher than the expected 0.1%. This change shows a strong trend in the housing market, with the actual rise being four times larger than anticipated.
Several financial market events are happening alongside this news. The Dow Jones Industrial Average dipped slightly during the holiday season. At the same time, currency pairs like NZD/USD and GBP/USD are fluctuating due to factors such as global tensions and shifting policy expectations.
Expectations For The Economy
Economists have solid expectations for advanced countries in 2026-2027. Influential factors from 2025 are expected to continue impacting economic performance in 2026. Discussions about the crypto market for 2026 are also underway, following a year of volatility and optimism for growth due to regulatory changes and technological progress. A trading guide for 2025 identifies top brokers based on various criteria. It specifically highlights options for cost-conscious traders, gold trading, and regional selections, detailing the pros and cons of different brokers. It’s essential for investors to do thorough research and understand the risks involved. All investments in financial markets come with the risk of loss. Due to low trading volumes during the holidays, markets are moving sideways as we approach the New Year. The biggest news this week was the U.S. Housing Price Index for October, which significantly exceeded expectations at 0.4%. This indicates that underlying inflation may be more persistent than many anticipated as we move toward 2026. This housing information conflicts with what the market expects from the Federal Reserve. In 2025, we noticed a strong housing trend, with the S&P Case-Shiller Index showing year-over-year increases of more than 5%, even with higher borrowing costs. In contrast, the derivatives market, specifically the CME FedWatch Tool, is suggesting several interest rate cuts for 2026.A Disconnect In Market Expectations
This disconnect makes the upcoming Fed minutes from the December meeting crucial. We need to keep an eye on interest rate futures, as a strict approach in those minutes could quickly change expectations for rate cuts. Any indication of persistent inflation related to the housing market may lead to significant market shifts. This uncertainty also creates opportunities in foreign exchange options, especially with differing stances from central banks. The Reserve Bank of Australia has taken a strict view, while the Bank of England is approaching easing cautiously. If the Fed takes a surprisingly firm stance, this could strengthen the U.S. Dollar, making put options on GBP/USD appealing, while call options on AUD/USD could be worthwhile if the Fed indicates a pivot sooner than expected. We should also consider volatility in the weeks ahead. The CBOE Volatility Index (VIX) is currently low, trading near multi-year lows around 13 during this holiday season. This suggests options are relatively inexpensive, providing a cost-effective way to prepare for market surprises in early January when trading volumes return to normal. Create your live VT Markets account and start trading now.In October, US home price indices exceeded forecasts, increasing by 1.3% year-on-year.
The S&P/Case-Shiller Home Price Indices in the United States reported a 1.3% increase in home prices for October, exceeding the expected 1.1%. This shows a stronger performance in the housing market than anticipated.
