Forex News

• Gold approaches the $4,200 area, with downside attempts limited above $4,140.
• A mild rebound in US Yields is supporting the US Dollar and weighing on precious metals.
• XAU/USD v¡bylls are focusing on the November peaks, at $4,210 and $4,245.

Gold (XAU/USD) keeps crawling higher, and is on track to close the week 2.7% higher, with the US Dollar weighed by rising bets of Fed monetary easing. XAU/USD has been capped at $4,190 earlier on Friday, as the US Dollar picked up in a calm Thanksgiving session, but downside attempts remain limited above $4,140 so far.

The US Dollar Index, which measures the value of the US Dollar against a basket of six currencies, is picking up from lows on Friday, favoured by a mild rebound in US Treasury yields, but it remains on track for its worst weekly performance in months. 

Dovish comments from Fed officials and weak US consumption figures have prompted investors to ramp up hopes of a Fed rate cut in December, which has sent US Treasury yields and the US Dollar tumbling this week.

Technical Analysis: Bulls are focusing on the $4,245 level

The technical picture remains positive. The 4-hour Relative Strength Index is trending higher, reaching levels past 60, and the Moving Average Convergence Divergence (MACD) has turned up and is crossing the signal line, highlighting growing bullish pressure.

The move above $4,100 confirmed that the bearish correction from the November peak is over, and bulls have shifted their focus to the November 14 high, at $4,210, on track for November’s peak, at $4,245.

On the downside, the mentioned $4,140 support (November 27 low) keeps the bullish trend in play. A bearish reaction below here brings the  November 25 low, near $4,100, to the focus, ahead of the November 21 and 24 lows between $4.025 and $4,040.

US Dollar (USD) is likely to consolidate within a range of 7.0680/7.0880. In the longer run, downward momentum remains strong; if USD breaks below 7.0600, the next level to watch is 7.0400, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Next level to watch for USD/CNH is 7.0400

24-HOUR VIEW: "Yesterday, when USD was at 7.0680 in the early Asian trade, we highlighted the following: 'Strong downward momentum is likely to continue to outweigh oversold conditions. Today, USD could break below 7.0600, but it remains to be seen if it can maintain a foothold below this level. The next support at 7.0400 is unlikely to come into view today. On the upside, resistance levels are at 7.0750 and 7.0830'. Our view was incorrect, as after dropping to a low of 7.0663, USD rebounded to 7.0816 before pulling back to close at 7.0763 (+0.10%). The current price movements are likely part of a consolidation, and today, we expect USD to trade within a range of 7.0680/7.0880."

1-3 WEEKS VIEW: "We turned negative on USD early this week. Tracking the subsequent decline, we indicated yesterday (27 Nov, spot at 7.0680) that 'downward momentum remains strong and if USD breaks below 7.0600, the next level to watch is 7.0400'. Although downward momentum has slowed somewhat with the subsequent rebound, we will continue to hold the same view as long 7.0930 (no change in ‘strong resistance’ level) is not breached."

Rabobank's latest market comments highlight a significant political setback for the French government, as the National Assembly failed to finalize the 2026 draft budget's first reading.

Despite the setback not being fatal, it clearly underlines the mounting difficulties in meeting fiscal objectives before the year-end, potentially leading to special procedures or contentious Article 49.3 use, although the latter has been dismissed due to associated political risks.

France's budget battle continues amid political risks

"The French government faced a significant setback this week as the National Assembly failed to complete the first reading of the 2026 draft budget before the 24 November deadline."

"This process makes it increasingly unlikely that Finance Minister Lecornu will achieve his goal of reducing the deficit to 4.7% in 2026 from 5.4% in 2025."

"Overall, Saturday’s setback wasn’t fatal, but it underscores the growing challenges in meeting fiscal targets before year-end."

(This story has been created with the assistance of AI.)

USD is likely to trade sideways between 156.00 and 156.75. In the longer run, soft underlying tone suggests there is a chance for USD to edge downward; any decline is likely part of a lower range of 155.05/157.05, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Chance for USD/JPY to edge downward

24-HOUR VIEW: "While we indicated yesterday that 'there is a chance for USD to test 155.55', we pointed out that 'the major support at 155.05 is not expected to come under threat'. USD then declined, but it rebounded from a low of 155.69. Momentum indicators are turning flat, and USD is likely to trade sideways today, probably between 156.00 and 156.75."

1-3 WEEKS VIEW: "In our most recent narrative from two days ago (26 Nov, spot at 156.15), we highlighted that 'the soft underlying tone suggests there is a chance for USD to edge downward, but any decline is likely part of a lower range of 155.05/157.05'. There is no change in our view for now."

The impact of change in political leadership has been clear in Japan with the yen notably weaker and JGB yields higher as market participants position for reflationist policies under the new leadership of Sanae Takaichi. The weekly cross border flow data was released earlier today by the MoF shows that the positive momentum in demand for Japanese equities by foreign investors is beginning to fade. That overall demand has helped propel a continued strong performance of Japanese equities, MUFG's FX analyst Derek Halpenny reports.

JGB yields rise amid political shift and stimulus package

"The considerable outperformance of Japanese equities (it’s the same vs European equities – over the same period since the weekend of Takaichi’s election victory the Euro Stoxx 600 is close to unchanged) means that hedge-related yen selling by foreign investors has likely picked up if those investors aim to maintain stable hedge ratios. The new inflows are also likely hedged to a high level given it still pays for a foreign investor to hedge their yen exposures, thus enhancing overall returns."

"We suspect the scale of foreign investor demand may start to recede going forward. This week we have had the release of details on the fiscal stimulus package and this was indeed larger than expected at JPY 21.3trn versus a package of JPY 13.9trn a year ago. The government projects a very optimistic economic impact of a lift to annual GDP growth of 1.4% on average over a three-year period, totalling JPY 24trn. We suspect the impact will be a lot less, as is usually the case with stimulus packages."

"In addition, foreign investor demand has likely been fuelled by the continued extreme caution from the BoJ in hiking rates. But the excessive yen weakness and communications from the BoJ suggest to us that the BoJ could indeed hike rates as soon as in December. So the record foreign investor demand could well be about to turn and if Japanese equities take a correction lower, some unwind of hedge-related yen short positions could follow. Making sure this is not too disruptive is probably why the BoJ is attempting to manage this cautiously with communications that subtly signal a shift in stance. Again, watch out for Governor Ueda’s speech on Monday."

New Zealand Dollar (NZD) could rise above 0.5735; any further advance is unlikely to reach 0.5755. In the longer run, the price action suggests NZD is likely to advance further; the levels to watch are 0.5735 and 0.5755, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

NZD is likely to advance further

24-HOUR VIEW: "NZD surged to a high of 0.5702 two days ago. Yesterday, we highlighted that 'there is a chance for NZD to rise to 0.5735'. However, we were of the view that 'given the deeply overbought conditions, a sustained rise above this level is unlikely'. NZD subsequently rose to a high of 0.5732. Although upward momentum has not increased much, NZD could rise above 0.5735 today. Based on the current momentum, any further advance is unlikely to reach the next resistance at 0.5755. Support levels are at 0.5710 and 0.5695."

1-3 WEEKS VIEW: "We revised our view on NZD to positive two days ago (26 Nov, spot at 0.5660). We highlighted that 'the rapid increase in short-term upward momentum could lead to NZD testing 0.5690'. After NZD subsequently soared to 0.5702, we highlighted yesterday (27 Nov, spot at 0.5700) that 'the price action suggests NZD is likely to advance further, and the levels to watch are 0.5735 and 0.5755'. We pointed out that 'to keep the momentum going, NZD must not break below 0.5640 (‘strong support’ level)'. We maintain the same view, but the ‘strong support’ level is now at 0.5665 instead of 0.5640."