As possibly the most critical week toward year-end, the Fed’s 25‑basis‑point rate cut this week is already common knowledge. This means the market now needs new information to trigger meaningful volatility. Some believe Chair Powell may announce a bond‑buying program, while others expect a highly dovish outlook at the press conference.
However, given that Powell is set to step down in May next year, doing nothing may actually be the best option.
From recent market behavior, even though monetary policy no longer dominates as it once did, investors still generally accept the logic that rate cuts equal easier financial conditions, which in turn are positive for markets.
Following this line of reasoning, announcing Treasury purchases or signaling a more dovish path for next year would both be supportive for risk assets. A relatively neutral or even slightly hawkish press conference, by contrast, would likely weigh on markets in the short term.
Overall, with the Christmas and New Year holidays approaching, the odds still favor only modest swings rather than big moves. In such a choppy environment, crude oil stands out as an attractive choice.
Crude oil has been discussed before as a classic high‑volatility instrument suited to buying low and selling high within a wide trading range. With support near 55 helping prices stabilize, the market now looks poised to stage a rebound toward the middle of the range. The resistance zone around 62.5–66.4 is expected to offer short‑selling opportunities, depending on whether the correction unfolds in more of a zigzag pattern or a flat consolidation.
Although news and fundamentals around the crude market frequently change, as long as Wall Street’s trading playbook remains the same, a straightforward buy‑low‑sell‑high approach still makes sense.
The crypto market also offers short‑term opportunities to trade within a range. Take Bitcoin as an example: after the prior uptrend deteriorated, the market’s center of gravity has already started to shift lower. However, the key support zone formed by 80,000 and 75,000 dollars appears difficult to break quickly. Over the past three weeks, the weekly chart has printed an inside‑bar pattern followed by a large doji, suggesting the market needs time to consolidate.
All that is required is to treat the lower support area as a potential buying zone, while using the previous breakdown level around 102,000 dollars as overhead resistance for selling. Judging from the ETH/BTC cross, the current bias is that the crypto market will likely rebound first and then weaken again.
When it comes to range‑bound conditions, the foreign‑exchange market, which has not seen large sustained trends for many years, is naturally another option.
Since most non‑U.S. currencies move in broadly similar fashion, focusing on the U.S. Dollar Index is enough. On the daily chart, the break of minor support near 99 has formed a short‑term double‑top pattern, yet on the weekly chart the dollar still sits in a middling, indecisive zone.
Support around 97, which coincides with a long‑term trendline, appears quite solid and suitable for buying on dips. Resistance near 100.25 also marks a multi‑week area of two‑way positioning, where several previous attempts to break higher have failed. For the dollar, the current preference is to buy on pullbacks, since although the upside may not be huge, a breakout above 100.25 could open a path toward the 104–105 region.
As for whether ever‑lower U.S. interest rates will hurt the dollar, this is not a major concern, because apart from Japan, most major central banks around the world are also cutting rates. Moreover, the Bank of Japan’s hinted rate hike in December does not seem to have provided much support for the yen.
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