Solid Goold Trading

Monday’s Edition

With Nick Goold

A busy week of economic data and central bank decisions gave traders a clearer view of market conditions. The main highlight was stronger-than-expected U.S. employment data, with employers adding 64,000 jobs in November, beating forecasts and showing a clear improvement from October. U.S. CPI inflation data also came in lower than expected, supporting the view that inflation is easing.

Central bank decisions were mostly as expected. The ECB kept interest rates unchanged, the Bank of England cut rates, and the Bank of Japan raised interest rates. However, the BOJ’s statement suggested a slower pace of rate hikes next year, which led to a sharp rise in USD/JPY.

During the week, equity markets in both the U.S. and Japan moved lower as concerns over high AI-related valuations continued. Investor profit-taking after a strong year for equities also added pressure. In contrast, gold continued to rise, moving higher toward record levels as investors looked for safety amid changing rate expectations.

Markets This Week

U.S. Stocks

The Dow index ended the week lower as investors took profits after a strong rise in 2025, while concerns over the valuations of AI-related companies continued to weigh on sentiment. With markets expected to be quieter, further profit-taking remains a risk, making selling into strength the preferred approach in the near term. Resistance is seen at 48,500 and 49,000, while support is located at 48,000, 47,500, 47,000, 46,500, and 46,000.

Japanese Stocks

Japanese stocks moved lower alongside U.S. markets for most of the week, before rebounding after the Bank of Japan meeting. Markets scaled back expectations for further Japanese rate hikes, which led to a sharp weakening of the yen and supported the Nikkei. Looking ahead, volatility may increase with Japanese markets open all week and the risk of possible Bank of Japan intervention. Given the risk of a quick pullback, the focus remains on selling opportunities. Key levels remain unchanged, with resistance at 51,000円, 51,500円, and 52,000円, and support at 49,000円, 48,000円, and 47,000円.

USD/JPY

Ahead of the expected Bank of Japan rate hike, USD/JPY moved lower and found support near the early-month lows, but while the hike itself was widely priced in, the BOJ’s statement surprised markets and led traders to reduce expectations for further rate rises in 2026, triggering a sharp rebound back toward the highs of the year. Looking ahead, USD/JPY remains a key focus, with the risk of Bank of Japan yen-buying intervention in thin markets if weakness continues; the pair is overbought in the short term, raising the risk of a pullback, although a break above the yearly highs could see a quick extension higher before any sharp reversal. Resistance is at 158, 159, and 160, while support is at 156, 155, and 154.5.

Gold

Gold continued its strong uptrend last week, returning to record highs. With momentum still firm, thin market conditions could allow prices to push sharply above recent highs. The focus remains on buying opportunities as long as gold holds above the 10-day moving average. Resistance is seen at $4,350, $4,380, $4,400, and $4,500, while support is located at $4,300, $4,250 and $4,200.

Crude Oil

The recent downtrend in crude oil continued as the market remained focused on oversupply concerns and weakening demand. While the 2025 lows were tested and held for now, the broader downtrend remains strong, keeping the focus on selling opportunities. Resistance is seen at $60, $65, $66.50, $70, and $75, while support remains at $55 and $50.

Bitcoin

Bitcoin saw a quiet week of range trading as activity slowed toward the end of the year. While holiday conditions could still allow for a surprise move, range trading between $85,000 and $95,000 remains the preferred short-term strategy. Resistance is at $95,000 and $100,000, while support is at $85,000, $80,000, and $75,000.

This Week’s Focus

Monday: U.K. GDP
Tuesday: Japan BoJ Core CPI, U.S. Durable Goods, GDP, Industrial Production and Consumer Confidence
Wednesday: Japan Monetary Policy Meeting Minutes
Thursday: Japan BoJ Governor Ueda speech, Christmas Day
Friday: Japan Tokyo Core CPI and Industrial Production

This is a shortened trading week, with most major markets closed on Thursday and Friday for the Christmas holiday. There is still some important U.S. data due, which could create volatility, and after the sharp weakening of the yen last week, there is also potential for Bank of Japan intervention if the move extends further. While trading conditions are likely to be quiet, reduced liquidity means there is always the risk of sudden, large market moves.