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• EUR/JPY trades with mild gains around 182.75 in Friday’s early European session. 
• The cross maintains the positive view with strong RSI momentum. 
• The immediate resistance level emerges at 182.82; the initial support level is located at 181.18. 

The EUR/JPY cross posts modest gains near 182.75 during the early European session on Friday. The Japanese Yen (JPY) softens against the Euro (EUR) as traders remain worried about Japan's deteriorating fiscal condition on the back of Prime Minister Sanae Takaichi's massive spending plan and sluggish economic growth. The final reading of the German Harmonized Index of Consumer Prices (HICP) will be released later on Friday. 

The Bank of Japan (BoJ) interest rate decision will take center stage next week. Rising bets for an imminent rate hike by the Japanese central bank could support the JPY and act as a headwind for the cross. According to a December 2-9 Reuters poll, 90% of economists expected the BoJ to raise short-term interest rates to 0.75% from 0.50% at the December meeting. This is a significant increase over the last Reuters survey conducted last month, which only had 53%.

Technical Analysis:

In the daily chart, EUR/JPY trades at 182.75. It stands well above the rising 100-day EMA at 175.89, keeping the broader uptrend intact. The positive slope of the average supports continuation even as the distance from the mean increases. RSI at 68.85 sits near overbought, signaling strong momentum that could temper if price consolidates.

Price hovers near the upper Bollinger Band at 182.82, indicating persistent bullish pressure with stretched conditions emerging. The bands have narrowed from prior wide readings and are beginning to widen modestly, pointing to improving directional energy. A pullback would guide toward the middle band at 181.18, while deeper weakness could find support at the lower band at 179.53. A daily close above the band could open the path to fresh highs.

(The technical analysis of this story was written with the help of an AI tool)

• The Japanese Yen drifts lower as the upbeat market mood undermines safe-haven demand.
• Concerns about Japan’s deteriorating fiscal condition also keep the JPY bulls on the defensive.
• The divergent BoJ-Fed policy expectations should cap any further gains for the USD/JPY pair.

The Japanese Yen (JPY) sticks to its modest intraday losses through the Asian session on Friday, though the downside remains cushioned amid hawkish Bank of Japan (BoJ) expectations. Prime Minister Sanae Takaichi's massive spending plan has exacerbated concerns about Japan's public finances amid sluggish economic growth. This, along with the prevalent risk-on environment, turned out to be key factors behind the safe-haven JPY's relative underperformance against its American counterpart.

That said, the growing acceptance of an imminent interest rate hike by the BoJ as early as next week is holding back the JPY bears from placing aggressive bets. The US Dollar (USD), on the other hand, struggles to attract any meaningful buyers and languishes near a two-month low, touched on Thursday, on the back of the Federal Reserve's (Fed) dovish outlook. This, in turn, warrants some caution before positioning for an extension of the USD/JPY pair's overnight bounce from sub-155.00 levels.

Japanese Yen bulls not ready to give up yet as hawkish BoJ bets counter receding safe-haven demand

• Asian stocks advanced in early trade on Friday, tracking the overnight strength on Wall Street, and undermine traditional safe-haven assets. Adding to this, concerns about Japan's public finances on the back of Prime Minister Sanae Takaichi's reflationary push keep the Japanese Yen on the back foot during the Asian session.
• The Corporate Goods Price Index released on Wednesday indicated that inflation in Japan remains above the historic levels. This validates Bank of Japan Governor Kazuo Ueda's hawkish view earlier this week that the likelihood of the central bank's baseline economic and price outlook materialising had been gradually increasing.
• This backs the case for a further BoJ policy normalization. Traders might also refrain from placing aggressive JPY bearish bets ahead of the highly anticipated two-day BoJ meeting starting on December 18. Moreover, the prevalent US Dollar bearish sentiment might keep a lid on any meaningful upside for the USD/JPY pair.
• In a widely expected move, the US Federal Reserve lowered borrowing costs by 25 basis points at the end of a two-day policy meeting on Wednesday and projected just one more rate cut in 2026. Investors, however, remained hopeful about two more rate cuts in 2026 in the wake of Fed Chair Jerome Powell's dovish remarks.
• During the post-meeting press conference, Powell told reporters that the US labor market has significant downside risks and the Fed does not want its policy to push down on job creation. This, in turn, keeps the USD close to an over two-month low, touched on Thursday, and should act as a headwind for the USD/JPY pair.
• Traders now look forward to speeches from influential FOMC members, which might provide some impetus later during the North American session in the absence of any relevant economic releases from the US. The focus, however, will remain glued to the highly-anticipated BoJ monetary policy meeting next week.

USD/JPY seems vulnerable while below the overnight swing high, around the 156.15 region

From a technical perspective, the overnight swing high, or levels just above the 156.00 round figure, could act as an immediate hurdle for the USD/JPY pair. A sustained strength beyond might trigger a fresh bout of a short-covering move and push spot prices to the 157.00 neighborhood, or the weekly high. Some follow-through buying should pave the way for additional gains towards the 157.45 intermediate hurdle en route to a multi-month top, around the 158.00 mark, touched in November.

On the flip side, bearish traders might now wait for acceptance below the 155.00 psychological mark before placing fresh bets. The USD/JPY pair might then turn vulnerable to accelerate the fall towards retesting the monthly trough, around the 154.35 area, touched last Friday. This is closely followed by the 154.00 round figure, below which spot prices could slide to the next relevant support near the 153.60 region before eventually dropping to sub-152.00 levels.

• The Indian Rupee falls to near 90.86 against the US Dollar amid uncertainty surrounding the US-India trade deal.
• So far, FIIs have remained net sellers on all trading days of December.
• Investors await India’s retail CPI and the US NFP data for November.

The Indian Rupee (INR) extends its decline against the US Dollar (USD) on Friday, with the USD/INR pair hitting fresh all-time highs at 90.86. The Indian currency continues to underperform its peers as investors remain anxious over whether the United States (US) and India will reach a trade deal in the near term.

No major outcome has come out of the two-day meeting between Deputy US Trade Representative Rick Switzer and his team, and top negotiators from India, keeping uncertainty over the US-India trade deal intact.

A slight optimism built on the US-India trade pact outlook on Wednesday when US Trade Representative Jamieson Greer stated, while testifying before the Senate Appropriations Committee, that the latest offer by New Delhi is the "best ever" the US has seen, while keeping the claim that India is a “tough nut to crack”. However, sentiment over the Indian Rupee is expected to remain bogged down unless a deal is announced.

On comments by US Trade Representative Greer, Commerce and Industry Minister Piyush Goyal stated on Thursday that Washington should sign the bilateral deal if it is very happy with the offer. "His happiness is very much welcome. And, I do believe that if they are very happy, they should be signing on the dotted lines,” Goyal said, PTI reported.

It seems that the Indian equity market will continue to witness outflows from overseas investors unless a trade deal between the US and India is announced. Foreign Institutional Investors (FIIs) have remained net sellers so far in all trading days of December, and have offloaded stake worth Rs. 18,491.29 crore.

Daily digest market movers: US Dollar outperforms Indian Rupee ahead of India’s retail CPI data

• The Indian Rupee underperforms the US Dollar even as the latter is expected to close in red for the third straight week. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, strives to regain ground after posting a fresh seven-week low of 98.13 on Thursday.
• The US Dollar has been under pressure since Wednesday when the Federal Reserve (Fed) ruled out the possibility of a pause in the ongoing monetary-easing campaign despite inflationary pressures remaining well above the 2% target.
• The Fed’s dot plot showed that policymakers collectively see the Federal Fund Rate heading to 3.4% by the end of 2026, signaling that there will be one interest rate cut next year. However, Fed Chair Jerome Powell clarified that the bar of another interest rate cut is very high, and we are close to the upper range of neutrality, a level that neither stimulates nor restricts the economy.
• Before the monetary policy announcement, market participants anticipated the Fed to signal that it is done with trimming interest rates, following a 25-basis-point (bps) reduction to 3.50%-3.75%.
• Going forward, investors will pay close attention to the US Nonfarm Payrolls (NFP) data for fresh cues on the interest rate outlook. The impact of the official employment data will be significant on market expectations for the Fed’s monetary policy outlook, as the central bank has reduced borrowing rates in its last three meetings due to downside labor market risks.
• In Friday’s session, the USD/INR pair will be influenced by India’s retail Consumer Price Index (CPI) data for November, which will be published at 10:30 GMT. India’s retail inflation is expected to have grown by 0.7% on an annualized basis, faster than 0.25% in October.

Technical Analysis: USD/INR approaches 91.00

In the daily chart, USD/INR trades at 90.6885. The 20-day Exponential Moving Average (EMA) at 89.8183 rises and stays beneath the spot price, keeping the short-term uptrend intact and supporting dip-buying interest.

Price action remains above the moving average, suggesting the advance is being tracked by trend followers.

The 14-day Relative Strength Index (RSI) at 69.27 edges toward overbought, confirming firm bullish momentum while hinting at risk of fatigue on further gains.

The bias stays firm as long as USD/INR holds above the rising 20-day EMA, with pullbacks expected to be absorbed near the average. A decisive break above the fresh all-time high of 90.86 could lead to further advancement towards 92.00.

RSI hovering just below 70 signals strong but stretched momentum; a push above 70 could trigger consolidation, while sustained readings below that threshold would maintain an orderly grind higher. A daily close back under the 20-day EMA would soften the tone and open room for a deeper retracement towards the December 1 low at 89.51.

(The technical analysis of this story was written with the help of an AI tool)

• GBP/JPY regains positive traction on Friday amid the emergence of some selling around the JPY.
• Concerns about Japan’s public finance and a positive risk tone undermine the safe-haven JPY.
• The divergent BoJ-BoE outlooks warrant caution for bulls ahead of important UK macro releases.

The GBP/JPY cross attracts fresh buyers following the previous day's modest decline and climbs back above mid-208.00s during the Asian session on Friday. Spot prices remain close to the highest level since August 2008, touched earlier this week, as traders now look forward to the UK data dump for a fresh impetus.

The UK Office for National Statistics (ONS) will publish the monthly GDP report and Industrial Production figures later today. The data will influence the British Pound (GBP) and produce short-term trading opportunities around the GBP/JPY cross. In the meantime, a combination of factors undermines the Japanese Yen (JPY) and might continue to act as a tailwind for spot prices.

Investors remain worried about Japan's deteriorating fiscal condition on the back of Prime Minister Sanae Takaichi's massive spending plan. Apart from this, the prevalent risk-on environment – as depicted by a generally positive tone around the equity markets – is seen weighing on safe-haven assets, including the JPY, which, in turn, offer some support to the GBP/JPY cross.

The downside for the JPY, however, remains cushioned in the wake of firming expectations for an imminent interest rate hike by the Bank of Japan (BoJ) as early as next week. This marks a significant divergence in comparison to bets that the Bank of England (BoE) will lower borrowing costs at its policy meeting next Thursday, which should cap any further gains for the GBP/JPY cross.

Heading into the key central bank event risks, trades next week will also confront the release of important UK macro data – including monthly employment details, the latest consumer inflation figures, and flash PMIs. This, in turn, warrants some caution before placing fresh bullish bets around the GBP/JPY cross and positioning for an extension of over a one-month-old uptrend.

• EUR/USD softens to around 1.1735 in Friday’s early European session.
• The major pair loses ground on firmer USD, but expectations of Fed rate cuts next year might cap its downside. 
• ECB’s Lagarde said policy is in a good place and that the bank could update its projections in December.

The EUR/USD pair retreats from a 10-week high to near 1.1735 during the early European session on Friday, pressured by a modest rebound in the US Dollar (USD).  The potential downside for the major pair might be limited amid the prospect of the US Federal Reserve (Fed) rate cuts next year. The final reading of the German Harmonized Index of Consumer Prices (HICP) will be released later on Friday. 

The US central bank cut interest rates by 25 basis points (bps) at the conclusion of its two-day meeting on Wednesday, marking the central bank's third reduction of the year. Fed officials were split on the decision to lower rates to a range of 3.50%-3.75%, with policymakers dissenting on both sides. Comments from Fed Chair Jerome Powell were seen by traders as less hawkish than expected and exerted some selling pressure on the Greenback against the Euro (EUR). 

Furthermore, renewed concerns about the Fed's independence under US President Donald Trump’s administration might contribute to the USD’s downside. Wall Street still views White House economic adviser Kevin Hassett as the most likely candidate to become the next Fed Chair. Analysts believe that Hassett is expected to push for more rate cuts.

Rising bets that the European Central Bank (ECB) is done cutting interest rates could support the shared currency in the near term. ECB President Christine Lagarde reiterated that the current monetary policy stance is in a good position. Meanwhile, ECB policymakers Francois Villeroy de Galhau and Gediminas Simkus stated that there is no immediate reason to either cut or raise rates, as the current policy stance is considered to be in a "good place”.

Traders will take more cues from the Fedspeak later in the day. Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee are scheduled to speak. Any hawkish remarks from Fed officials could help limit the USD’s losses in the near term. 

UK GDP, Industrial Production Data Overview

The United Kingdom (UK) economic docket features the monthly Gross Domestic Product (GDP) print for October and Industrial Production figures, to be published by the Office for National Statistics (ONS) this Thursday at 07:00 GMT.

The UK economy is expected to have registered a modest 0.1% growth in October, compared to the 0.1% contraction recorded in the previous month. Meanwhile, the UK Industrial Production is seen rising 0.7% MoM after declining 2% in September, while the annual output is anticipated to fall 1.2% during the reported month, following a 2.5% decline in the previous month.

How could UK GDP and Industrial Production data affect GBP/USD?

Any disappointment from the UK macro data, especially the growth figures, will reaffirm market bets that the Bank of England (BoE) will cut interest rates next week and weigh on the British Pound (GBP). The immediate market reaction, however, is more likely to remain limited amid the underlying bearish sentiment surrounding the US Dollar (USD), which continues to be weighed down by the Federal Reserve's (Fed) dovish outlook.

In contrast, better-than-expected UK economic releases should assist the GBP/USD pair to build on its recent uptrend witnessed over the past three weeks or so. Even from a technical perspective, this week's sustained breakout and acceptance above the very important 200-day Simple Moving Average (SMA) backs the case for a further appreciation for spot prices. Hence, any corrective pullback is more likely to get bought into and remain limited.

Some follow-through buying beyond the overnight swing high, around the 1.3435-1.3440 area, will reaffirm the positive outlook and allow the GBP/USD pair to reclaim the 1.3500 psychological mark. On the flip side, the 200-day SMA, currently pegged near the 1.3340 region, should protect the immediate downside, below which spot prices could weaken below the 1.3300 mark and test the next relevant support near the 1.3240-1.3235 zone.

• Gold attracts some sellers on Friday as the upbeat market mood undermines safe-haven assets.
• The Fed’s dovish outlook keeps the USD depressed and offers some support to the commodity.
• The fundamental backdrop favors the XAU/USD bulls and backs the case for a further move up.

Gold (XAU/USD) edges lower during the Asian session on Friday and erodes a part of the previous day's strong gains, snapping a three-day winning streak to the $4,285-4,286 region, or the highest level since October 21. The prevalent risk-on environment – as depicted by a generally positive tone around the equity markets – is seen undermining demand for the safe-haven precious metal. Apart from this, a modest US Dollar (USD) recovery from a two-month low touched on Thursday turns out to be another factor exerting some pressure on the commodity.

Any meaningful USD appreciation, however, still seems elusive in the wake of dovish Federal Reserve (Fed) expectations, which might continue to offer support to the non-yielding Gold. Apart from this, persistent geopolitical uncertainties, amid stalled talks on the Russia-Ukraine peace deal, help limit the downside for the XAU/USD pair. Nevertheless, the bullion remains on track to register strong weekly gains. Moving ahead, traders now look forward to speeches from influential FOMC members to grab short-term opportunities heading into the weekend.

Daily Digest Market Movers: Gold is pressured by receding safe-haven demand; dovish Fed favors bulls

• The US Federal Reserve's dovish outlook dragged the US Dollar to an over two-month low and lifted the non-yielding Gold to its highest level since October 21 on Thursday. In a widely expected move, the US central bank lowered borrowing costs by 25 basis points on Wednesday and projected just one more rate cut in 2026.
• Fed Chair Jerome Powell said during the post-meeting press conference that the US labor market has significant downside risks and that the central bank does not want its policy to push down on job creation. This fueled speculations about two more rate cuts by the Fed next year and, in turn, favors the XAU/USD bulls.
• Meanwhile, Asian stocks tracked the overnight strength on Wall Street and advanced in early trade on Friday, which is seen undermining demand for the traditional safe-haven bullion. However, prospects for lower interest rates in the US, along with persistent geopolitical uncertainties, could lend support to the commodity.
• Meanwhile, US President Donald Trump is extremely frustrated with Russia and Ukraine, and he doesn't want any more talk, his spokeswoman said on Thursday. Earlier, Ukrainian President Volodymyr Zelensky said that the US was pushing it to cede land to Russia as part of an agreement to end a nearly four-year war.
• There isn't any relevant market-moving economic data due for release from the US on Friday, leaving the USD at the mercy of speeches from influential FOMC members. Apart from this, the broader risk sentiment could provide some impetus to the yellow metal, which remains on track to register strong weekly gains.

Gold seems poised to climb further; overnight breakout through a two-week-old range remains in play

The overnight strong move up confirmed a fresh bullish breakout through a nearly two-week-old trading range hurdle, around the $4,245-4,250 region. Moreover, oscillators on the daily chart are holding in positive territory and are still away from being in the overbought zone, suggesting that the path of least resistance for the Gold price remains to the upside. Hence, any further pullback towards the aforementioned resistance breakpoint could be seen as a buying opportunity. This should limit losses for the XAU/USD pair near the $4,220-4,218 region, which is followed by the $4,200 mark and the $4,170-4,165 support area. A convincing break below the latter might shift the bias in favor of bearish traders and pave the way for deeper losses.

On the flip side, the $4,300 mark now seems to act as an immediate hurdle, above which the XAU/USD pair could climb to the next relevant hurdle near the $4,328-4,330 region. The momentum could extend further and allow the Gold to aim towards challenging the all-time peak, around the $4,380 zone, touched in October. Some follow-through buying beyond the $4,400 round figure will be seen as a fresh trigger for bullish traders and set the stage for an extension of the commodity's recent well-established uptrend from the October monthly swing low.

Gold prices fell in India on Friday, according to data compiled by FXStreet.

The price for Gold stood at 12,397.21 Indian Rupees (INR) per gram, down compared with the INR 12,422.55 it cost on Thursday.

The price for Gold decreased to INR 144,596.50 per tola from INR 144,894.20 per tola a day earlier.

FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

(An automation tool was used in creating this post.)