The forex market today operates in a subdued trading environment as the Thanksgiving holiday in the United States curtails activity. However, the broader narrative remains shaped by growing expectations of a Federal Reserve rate cut in December, which has exerted downward pressure on the US Dollar. The Dollar Index (DXY) has slipped to 99.20, marking its fourth consecutive day of losses, as investors increasingly price in a dovish shift in monetary policy.

This sentiment has provided a tailwind for major currencies like the Euro and the British Pound, while commodity-linked currencies such as the Australian and New Zealand Dollars have also capitalized on the greenback’s weakness. Meanwhile, commodities and cryptocurrencies are exhibiting mixed trends, reflecting a market grappling with thin liquidity and cautious optimism.

Forex Market Today

Currency Market Overview

EUR/USD and GBP/USD

The EUR/USD pair has consolidated above the 1.1600 level, reaching a 10-day high during the Asian session. This marks a continuation of its weekly rally, driven by a combination of US Dollar weakness and technical momentum. The pair is eyeing resistance at 1.1656, a level reinforced by the 55-day and 100-day Simple Moving Averages (SMAs). 

A break above this threshold could pave the way for a test of the October high at 1.1778. On the downside, support is seen near 1.1468, with a breach potentially exposing the 200-day SMA at 1.1420. Fundamentally, the Euro remains tethered to the US Dollar’s trajectory, with limited catalysts emerging from the Eurozone itself. The market’s focus remains on the Federal Reserve’s policy direction, as dovish expectations continue to dominate.

Similarly, GBP/USD has extended its rally, trading around 1.3260 after six consecutive sessions of gains. The pair has benefited from the UK’s Autumn Budget announcement, which provided a modest boost to sentiment, alongside the broader weakness in the US Dollar. However, the outlook for the British Pound is tempered by concerns over the Bank of England’s policy stance. 

Recent economic data, including a cooling Consumer Price Index (CPI) and weak retail sales, have fueled speculation of a potential rate cut by the BoE in December. This divergence in monetary policy expectations between the Fed and the BoE could limit the Pound’s upside, with resistance seen at 1.3300 and support near 1.3040.

USD/JPY and USD/CAD

The Japanese Yen has strengthened to 155.90 against the US Dollar, supported by speculation of government intervention to curb excessive currency weakness. Additionally, expectations of a hawkish shift by the Bank of Japan (BoJ) have bolstered the Yen. Recent comments from Japanese officials, including Finance Minister Satsuki Katayama, have signaled a willingness to act against market volatility, while the BoJ’s focus on inflationary risks suggests a potential rate hike in December. 

Nonetheless, the Yen’s gains are tempered by a risk-on market environment, which has limited safe-haven demand.

Meanwhile, USD/CAD has declined to 1.4030, with the Canadian Dollar finding support from stable oil prices and a softer US Dollar. The pair remains within an ascending channel pattern, with immediate resistance at 1.4059 and support near 1.3990. 

The outlook for the Canadian Dollar is closely tied to crude oil dynamics, as WTI prices hover around $58.49 per barrel. A sustained break below the psychological level of 1.4000 could signal further downside for USD/CAD, particularly if oil prices stabilize or rise.

AUD/USD and NZD/USD

The Australian Dollar has risen to 0.6540, extending its gains for the fifth consecutive session. The currency has been buoyed by robust domestic economic data, including a 6.4% quarterly increase in private capital expenditure, which exceeded market expectations. 

Additionally, the Reserve Bank of Australia’s (RBA) cautious stance on monetary policy has supported the AUD, with markets pricing in a low probability of a rate cut in December. Technically, the pair faces resistance near 0.6630, while support is seen at 0.6495.

The New Zealand Dollar has also advanced, reaching 0.5730, driven by a combination of technical breakouts and a broadly weaker US Dollar. The pair has broken through key resistance levels, including the 200-period SMA on the 4-hour chart, signaling a bullish bias.

However, overbought conditions, as indicated by the Relative Strength Index (RSI), could limit further upside in the near term. Resistance is seen near 0.5750, while support lies at 0.5700.

Commodities and Cryptocurrencies

Fed Rate Cut Bets Influence Prices

Gold and Oil

Gold prices remain steady at $4,160 per ounce, underpinned by expectations of a Federal Reserve rate cut and ongoing geopolitical uncertainties. The metal has found support from a weaker US Dollar, which has enhanced its appeal as a safe-haven asset. However, the upside remains capped by technical resistance near $4,245, with momentum indicators suggesting a neutral bias. 

The broader narrative for gold hinges on the Fed’s policy trajectory, with markets assigning a 76% probability to a December rate cut.

Crude oil prices have softened, with WTI trading at $58.49 per barrel. The market has been weighed down by reports of a potential ceasefire between Russia and Ukraine, which could ease supply concerns. 

However, trading volumes remain thin due to the US holiday, and the outlook for oil prices remains uncertain amid mixed signals on global demand.

Bitcoin

Bitcoin has recovered to $91,347, supported by modest inflows into US-listed Bitcoin ETFs. Institutional demand has shown signs of stabilization, with inflows totaling $21.12 million on Wednesday. 

However, on-chain data highlights fragile market conditions, with limited liquidity and subdued demand. The cryptocurrency faces resistance near the psychological level of $100,000, while support is seen at $85,000. The market’s focus remains on liquidity dynamics and broader risk sentiment, which will likely dictate Bitcoin’s near-term trajectory.

Stock Market Performance

US equity markets have rallied, with the Nasdaq closing at 23,214.69, up 0.87%. Optimism over a potential Federal Reserve rate cut has lifted sentiment, alongside strong corporate earnings. Semiconductor stocks have led the gains, reflecting robust demand in the technology sector. 

The S&P 500 and Dow Jones have also posted significant advances, supported by falling bond yields and dovish Fed commentary. However, the sustainability of this rally remains contingent on upcoming economic data and central bank decisions.

Conclusion

The forex market remains in a holding pattern, influenced by thin liquidity and dovish Federal Reserve expectations. Major currencies like the Euro and Pound have gained against the US Dollar, while commodity-linked currencies have also shown resilience. Commodities and cryptocurrencies exhibit mixed trends, reflecting a cautious market environment. As markets await the December FOMC meeting, the focus will remain on economic data and central bank commentary. Investors should remain vigilant, as evolving market dynamics could introduce volatility in the weeks ahead.

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