Highlights of the Week 

• The Fed is the macro gravity well. 

Markets are heavily leaning toward a 25bp cut at the Dec 9–10 meeting (around high-80% implied odds in Fed funds futures), but the bigger trade is the message: projections (dots), Powell’s guidance, and how the Committee frames “insurance cuts” versus “restart of an easing cycle.” 

• Australia is moving in the opposite direction conceptually. 

The RBA is expected to hold at 3.60%, yet the policy bias has tilted more hawkish as inflation has stayed too warm for comfort. That keeps AUD supported versus lower-yielders and “cutting-cycle” stories. 

• Canada looks like “done cutting.”  

A Reuters poll suggests the BoC is expected to hold at 2.25% and stay on hold for a long stretch. That matters because it puts the CAD’s fate back in the hands of oil, risk appetite, and relative USD direction post-Fed. 

• SNB is a quiet risk event. 

Even a hold can move CHF if the SNB leans into or away from disinflation and currency strength concerns. (CHF isn’t in the attached charts, but SNB can still shift broader G10 risk pricing.) 

Central-bank “volatility week”, Fed + BoC + RBA + SNB set the tone for USD, CAD, and AUD crosses, with labour-market proxies and auctions as the secondary catalysts. 

Start with the real driver; the market is trading the forward path of rates, not the backward-looking data. In that environment, the “first derivative” matters more than the level: are we getting more cuts than priced, fewer cuts than priced, or a cut with a message designed to limit follow-through? 

Dot Plot Is the Real Catalyst, Not the Cut 

For USD, the pivot is between two plausible outcomes. Scenario A is the one markets are leaning into a 25bp cut framed as insurance against labour-market slippage, supported by dovish commentary from key officials in late November, with Powell acknowledging softer momentum but insisting the bar for additional cuts is higher. That outcome typically caps yields, pressures the dollar on rallies, and supports risk assets, at least tactically. 

Scenario B is the “hawkish cut / hawkish hold in disguise”: a cut happens, but dots and language push back against aggressive 2026 easing expectations.  

That can actually stabilize the dollar after the initial knee-jerk, because the market is currently pricing a fairly smooth glide-path lower. The week’s trade then becomes a repricing of the terminal rate and the speed of cuts, not the cut itself. 

How to Trade the Message 

The dot plot is the Fed’s cleanest way of telling markets whether a December cut is just “risk management” or the start of a more persistent easing cycle. The key point is that the market is already priced for a cut with high probability, so the surprise is less about the decision itself and more about the 2026 path. If the Fed’s median dot for 2026 stays meaningfully above what rates markets imply, the Committee is effectively pushing back against the market’s glide-path narrative, even if it delivers the cut. 

The starting anchor is the September SEP, where the median projections sat around 3.6% for end-2025 and 3.4% for end-2026. A 25bp cut in December would land the policy rate broadly consistent with that end-2025 median, which means the “new information” must show up in whether the Fed is willing to move the 2026 dots lower. That’s where the debate about data gaps, shutdown distortions, and uncertainty matters: a committee that feels less confident will typically keep dots higher and dispersion wider. 

Our base case is “cut + cautious dots.” In practice, that means the Fed eases once but maintains a 2026 median in the mid-3s (or only marginally lower), reinforcing that follow-through is not automatic and remains conditional on inflation progress and labour-market cooling. Markets have swung toward easier policy expectations recently, but the Fed can still try to prevent an overly dovish extrapolation by leaning on the dot plot and Powell’s framing. This combination often produces a two-stage price action: an initial risk-on move on the cut headline, then a USD and front-end yield rebound as traders digest the “not as many cuts as you think” message. 

For FX, the dot plot’s 2026 signal is the pivot for trend. A hawkish-leaning dot configuration (higher 2026 median, wide dispersion) typically supports DXY, caps EUR/USD, and pressures gold via higher real-rate expectations; a dovish dot shift that validates market pricing does the opposite, reinforcing USD downside and extending pro-risk trades. In other words: the December cut is the headline, but the dot plot is the steering wheel — and the market’s reaction will be driven by whether the Fed validates or rejects the 2026 easing path already embedded in prices. 

Now layer in politics risk-premia: speculation around the next Fed chair (e.g., Kevin Hassett discussed as a frontrunner in recent reporting) matters less for the next one meeting and more for how investors price Fed “reaction function” credibility into 2026. Even if the chair doesn’t “set rates alone,” persistent chatter can compress risk premia in front-end yields and keep the dollar biased softer on medium-horizon rallies. 

BoC on Hold: CAD Becomes an Oil-and-Risk Currency Again 

For CAD, the baseline is structurally supportive: if the BoC is on hold at 2.25% and indeed “done cutting,” CAD doesn’t need bullish domestic surprises to outperform — it mainly needs the global risk tape to not implode and oil to avoid a sharp leg lower. The sharper the US growth scares, the more USDCAD becomes a USD story; the sharper the global risk-off, the more CAD can underperform high-beta peers like AUD even if it holds up versus USD. 

RBA Hold, Hawkish Bias: AUD Crosses Trade Relative Policy, Not Just Beta 

For AUD, the RBA is the key. Reuters polling points to a hold at 3.60%, with the narrative shifting toward a prolonged hold (and even a non-trivial hike probability further out) because inflation has remained sticky. That makes AUD particularly sensitive to any hawkish nuance in the statement and press messaging — and sets up AUD crosses (like AUDCAD) as “relative policy” expressions rather than pure risk trades. 

Tactically, treat this as a “two-step week”: 

Step 1: event risk (RBA Tuesday, Fed/BoC Wednesday, SNB Thursday) sets the direction. 

Step 2: JOLTS, claims, and auction outcomes decide whether the move extends or mean-reverts via yields and liquidity conditions. 

Monday, 8^th December 2025 

• 01:50 – Japan (JPY) – GDP (QoQ) (Q3): -0.4% (Forecast -0.4%) 

Tuesday, 9^th December 2025 

• 05:30 – Australia (AUD) – RBA Interest Rate Decision (Dec): Forecast 3.60% 

• 17:00 – United States (USD) – JOLTS Job Openings (Sep): Forecast 7.200M (Prev 7.227M) 

• 20:00 – United States (USD) – 10-Year Note Auction 

Wednesday, 10^th December 2025 

• 16:45 – Canada (CAD) – BoC Interest Rate Decision: Forecast 2.25% 

• 17:30 – United States (USD) – Crude Oil Inventories: Prev 0.574M 

• 21:00 – United States (USD) – FOMC Economic Projections 

• 21:00 – United States (USD) – FOMC Statement 

• 21:00 – United States (USD) – Fed Interest Rate Decision: 3.75% (Forecast 4.00%) 

• 21:30 – United States (USD) – FOMC Press Conference 

Thursday, 11^th December 2025 

• 10:30 – Switzerland (CHF) – SNB Interest Rate Decision (Q4): 0.00% (Forecast 0.00%) 

• 15:30 – United States (USD) – Initial Jobless Claims: Forecast 191K 

• 19:00 – United States (USD) – 30-Year Bond Auction 

Friday, 12^th December 2025 

• 09:00 – United Kingdom (GBP) – GDP (MoM) (Oct): Prev -0.1% 

• 09:00 – Eurozone (EUR) – German CPI (MoM) (Nov): -0.2% (Forecast 0.3%) 

DXY (Daily) 

Double top risk: neckline test is the line between “pullback” and “trend reversal” 

DXY has printed a clear double top into 100.395 and is now trading beneath the former rising structure, with price pressing the neckline zone around 98.99 (your 100% Fib line at 98.992). The latest session closed at 98.944 after a 98.807 low, keeping price in the lower half of the Bollinger envelope (BB mid ~99.543, lower ~98.772) and below the prior impulse support. The WMA ~98.887 is being used as a soft shelf, but momentum is not repairing; PPO is negative and rolling, and ROC is negative (~-1.25), consistent with a fading rebound and a market that is vulnerable to another leg lower, especially with event volatility ahead. 

Main scenario 

breakdown confirmation below 98.99 and a measured move toward 97.6.  

As long as DXY fails to reclaim and hold above 98.99–99.05, the pattern remains “active.” A double top is not confirmed by the label; it’s confirmed by acceptance below the neckline. If that happens, the measured move aligns cleanly with your extension map: 

• Double top height ≈ 100.395 – 98.992 = 1.403 points 

• Projected target ≈ 98.992 – 1.403 = ~97.589, which matches your 200% extension at 97.589 

This confluence is the technical reason the current zone matters: it’s not just “support,” it’s the decision point between a controlled pullback and a full reversal continuation. 

Targets (downside path) 

• 98.610 (127.2%) first objective if neckline breaks and holds 

• 98.125 (161.8%) second objective / momentum magnet 

• 97.589 (200%) primary measured-move completion zone 

• 96.20/96.22 (3.5-year low area) is the “late-stage” target if risk-off intensifies or the market fully reprices the Fed path 

Key levels 

Resistance (sell-rallies zone while bearish): 

• 98.992–99.05 (neckline + psychological 99) 

• 99.528 (61.8%) 

• 99.543 (BB mid / pivot) 

• 100.395 (double-top highs / invalidation above here) 

Support: 

• 98.772 (BB lower) 

• 98.610 (127.2%) 

• 98.125 (161.8%) 

• 97.589 (200% / measured-move completion) 

The second top into 100.395 reads like a liquidity sweep: price ran the highs, failed to sustain above them, and then delivered bearish displacement back toward the neckline. In ICT terms, the most actionable area for sellers is usually the retest/rejection band just above the neckline (often where late buyers are trapped and stop placement is obvious). On your map, that fits best with 98.99–99.53: if price pops into that zone and fails to reclaim the BB mid / 99.54, the market is effectively offering a “sell-the-retest” structure. 

Alternative scenario  

failed breakdown can mean squeeze back to 99.53 then 100.40 

If DXY reclaims 98.99 and holds above it, then the double-top thesis weakens materially and the market can rotate back toward: 

• 99.528–99.543 (61.8% + BB mid) as the first “repair” zone 

• 100.395 as the larger invalidation / retest of the highs 

That alternative becomes more likely if the Fed delivers a hawkish-hold / hawkish-cut message that forces a repricing higher in front-end yields and restores support to the USD complex. 

Net: 98.99 is the week’s technical pivot. Below it, the chart is building a clean path toward 97.6; above it, DXY shifts back into a range-repair mode where 99.5 is the next decision level. 

AUDCAD (Daily) 

Breakout attempt: central banks decide if it sticks 

AUDCAD is pressing higher out of a multi-week consolidation range. Price is above the 100-WMA (around 0.9129 on your chart) and has pushed above the upper Bollinger band (~0.9229), which is typically seen during the early “expansion phase” after a squeeze.  

Momentum has improved; PPO is positive and rising, ROC is positive, and the latest volume bars are notably stronger into the breakout candle, a supportive sign that this is not just a low-liquidity drift. 

Main scenario 

Breakout continuation if 0.920 holds 

The cleanest framework is “breakout retest then extension,” especially with RBA Tuesday and BoC Wednesday acting as the macro catalyst. 

Technical targets (upside path) 

First: 0.92450 (127.2%) 

Then: 0.92965 (161.8%) 

Stretch: 0.93535 (200%) if RBA is hawkish and BoC is neutral-to-dovish. 

Key levels 

Resistance: 0.92450, 0.92965, 0.93535 

Support: 0.92044, 0.91474, 0.90905, 0.90553 

Alternative scenario 

false break back into range, if AUDCAD loses 0.92044 quickly (daily close back below), the market is likely to revert into the prior range and retest 0.91474, potentially 0.90905, with 0.90553 as the line in the sand. A false break here would usually coincide with either a dovish RBA surprise or a CAD-positive impulse (hawkish BoC tone or oil tailwind). 

Net: This is a week where the macro catalyst is obvious, and the technicals are already positioned. USDCAD looks like a completed reversal that wants follow-through; AUDCAD looks like a breakout that needs confirmation. The cleanest execution mindset is to let the events “confirm the direction” and then use the mapped levels for retests, rather than guessing the first spike. 

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