Markets opened the week on an optimistic note as growing signs that the U.S. government could soon resume operations boosted overall risk sentiment. The U.S. dollar index (DXY) hovered below the 100 mark but closed modestly higher at 99.59 (+0.06%), reflecting cautious optimism among investors. Meanwhile, U.S. Treasury yields remained steady, with the 10-year yield at 4.121% and the 2-year yield, which closely tracks Federal Reserve policy expectations, closing at 3.601%.

Gold Rallies Sharply as Fed Cut Bets Rise and Haven Demand Strengthens

Gold prices posted a strong rebound, with spot gold surging 2.85% to close around $4,115 per ounce, marking its highest settlement since October 23rd. Spot silver followed suit, climbing over 4% to reach its best level in nearly three weeks.
Weaker U.S. data—including job losses and a drop in consumer sentiment—reinforced expectations for a Fed rate cut in December, driving real yields lower and bolstering non-yielding assets like gold.

CWG analysts note that “gold’s breakout above the $4,100 level confirms renewed bullish momentum, with the potential to test $4,200–$4,350 in the near term.”

Crude Oil Steadies as U.S. Shutdown-End Hopes Support Demand Outlook

Oil prices stabilized amid improving market sentiment and expectations that the U.S. Senate’s progress toward reopening the federal government would bolster demand.
WTI crude recovered from intraday lows of $59.50, closing 0.3% higher at $60.14 per barrel, while Brent crude rose 0.43% to $63.81 per barrel.

Despite continued concerns over ample global supply and rising U.S. inventories, traders said optimism surrounding a potential government funding deal helped oil rebound from session lows.

Technical Outlook

USD/JPY – Testing 154.20 Resistance Amid Risk-On Momentum

USD/JPY continues to consolidate near 154.20, supported by strong buying interest and improved global sentiment.
A breakout above 154.20 could expose 155.10–156.50, while a drop below 153.00 may trigger pullback toward 150.40.
RSI at 62 and bullish MACD readings confirm the uptrend, with EMAs aligned for further gains.

Key Levels:

• Resistance: 154.20, 155.10

• Support: 153.00, 150.40

EUR/USD – Struggles to Clear 1.1560 Resistance; Sellers Remain Active

EUR/USD remains capped below 1.1560, with narrowing Bollinger Bands suggesting an upcoming breakout.
Bearish momentum persists, as RSI stays near 44 and price action remains below the 100- and 200-day EMAs.
A close above 1.1560 could target 1.1690, while failure to sustain could drag the pair back toward 1.1400–1.1380.

Key Levels:

• Resistance: 1.1560, 1.1690

• Support: 1.1400, 1.1380

XAU/USD – Bulls Regain Momentum Above $4,100

Gold extended its breakout above $4,100, driven by a strong rebound from $3,930 support and robust haven flows.
Technical momentum remains bullish with RSI at 58 and MACD confirming an uptrend.
A breakout above $4,350 could open the path toward $4,500, while holding above $4,100 remains crucial for sustaining momentum.

Key Levels:

• Resistance: 4,350, 4,500

• Support: 3,930, 3,800

Economic Headlines

1. Gold Soars as Weak Data Reinforces December Fed Cut Bets

Soft U.S. data strengthened expectations for a December Fed rate cut, while the Senate advanced a bill to end the government shutdown.
Spot gold hit a two-week high, up over 2% intraday, supported by declining real yields and safe-haven inflows.

2. Crude Oil Edges Higher as Shutdown Deal Nears

WTI settled above $60 as progress toward a U.S. funding deal improved risk appetite. However, supply concerns and cautious OPEC+ outlooks limited upside momentum.

3. AUD Rises on Hawkish RBA Comments and Strong Inflation

Hawkish remarks from RBA Deputy Governor Andrew Hauser and firm Q3 CPI (1.3% q/q) bolstered the AUD.
AUD/USD advanced toward 0.6540 before consolidating, supported by China’s import resilience.

4. JPY Weakens as Risk-On Tone Returns

Improved risk appetite and steady U.S. yields pressured the yen.
USD/JPY traded around 154.00, with intervention concerns still looming near 155.00.

5. EUR Consolidates Amid ECB Caution

EUR/USD remained range-bound near 1.1550, with ECB officials maintaining that current rates are appropriate.
Markets await ZEW sentiment data for direction.

6. USD Steadies as Fed Speakers Send Mixed Signals

Diverging Fed remarks left rate cut expectations intact.
Senate progress on government funding improved risk sentiment, helping the dollar index steady near 99.60.