EUR/USD dropped to over a three-week low on Thursday amid resurgent USD demand. The downside remains limited as traders await the Eurozone CPI and the US NFP report. The fundamental backdrop and technical setup supports prospects for a further downside. The EUR/USD pair came under heavy selling pressure on Thursday and dived to over a three-week low amid resurgent US Dollar demand, bolstered by upbeat US macro data. According to the report published by Automatic Data Processing (ADP), the US private sector employers added 235K jobs in December against consensus estimates for a reading of 150K. Moreover, Initial Jobless Claims unexpectedly declined to 204K in the last week of December from the previous week's downwardly revised print of 223 K. This pointed to a resilient US labour market and indicated that the economy ended 2022 on solid footing, which could allow the Federal Reserve to stick to its aggressive rate hike path. This, along with hawkish comments by Kansas City Fed President Esther George, forecasting rates above 5% for some time, triggered a sharp spike in the US Treasury bond yields. Apart from this, a fresh leg down in the US equity markets provided a strong boost to the safe-haven greenback. The shared currency, on the other hand, was undermined by speculations that the European Central Bank could opt for a gradual approach towards tightening its policy amid signs of easing inflationary pressures. It is worth recalling that the recent data released from Germany, France and Spain showed a surprise decline in consumer inflation during December, suggesting that the peak is already behind. Despite the aforementioned negative factors, the EUR/USD pair manages to find some support ahead of the 1.0500 psychological mark and edges higher during the Asian session on Friday. Traders seem reluctant to place aggressive bets and prefer to move on the sidelines ahead of the key macro releases. The next test for the Euro comes in the form of the flash Eurozone CPI print, though the focus remains glued to the closely-watched US monthly jobs data. The popularly known NFP report could influence the Fed's near-term policy outlook. This, in turn, will play a key role in driving the USD demand and help investors to determine the next leg of a directional move for the major. Technical Outlook From a technical perspective, the recent repeated failures to capitalize on moves beyond the 1.0700 mark and a subsequent breakdown below ascending channel support favour bearish traders. The outlook is reinforced by the fact that oscillators on the daily chart have just started drifting into negative territory. Some follow-through selling below the 1.0500 round figure will reaffirm the bias and make the EUR/USD pair vulnerable to testing the next relevant support near the 1.0410-1.0400 area. The downward trajectory could get extended further towards the very important 200-day SMA, currently around the 1.0315-1.0310 region. On the flip side, any meaningful recovery attempt might now confront a stiff barrier and meet with a fresh supply near the 1.0600 mark. This is followed by the aforementioned ascending channel support breakpoint, now turned resistance near the 1.0625-1.0635 region. A sustained strength beyond could trigger a short-covering move and allow the EUR/USD pair to aim back to conquer the 1.0700 round figure. Bulls, however, are likely to wait for some follow-through buying beyond the December monthly swing high, around the 1.0735 zone, before positioning for any further appreciating move.

Fed Chair Jerome Powell remains unimpressed with the reduction of the rate of inflation; down to 7.1% in November, from 9.1% June. The Summary of Economic Projections shows a desire of the Fed to increase their forecast for the Fed Funds Rate to 5% in 2023, up from the 4.6% projection made in the last SEP that was released in September. And yet, the Deep State of Wall Street is busy telling investors that the Fed is almost done raising rates, hence, and a new bull market is right around the corner. But history proves this premise to be false. For example, during the preamble to the Great Recession, the Fed Funds Rate reached its apex in June of 2006 at 5.25%. It took 3 years for it to ascend to that level, up from the 1% starting level back in June of 2003. Ben Bernanke then began to cut rates in September of 2007; but the Great Recession began anyway in December of that same year. And, exactly one year from that first rate cut, the stock market went into freefall. This is another clear example of many throughout history that shows rate hikes work with a long lag. The situation today is much worse. The Fed will have raised rates from 0% in March of 2022, to 5% by March of 2023. That is 500bps of rate hikes in just one year this time around, as opposed to 425 bps of rate hikes over the course of 3 years leading up to the Great Recession. And, today we have QT occurring as well, which involves the burning of $1 trillion per year out of the base money supply--whereas, during the period between 2003-2006, there was no such reduction in the balance sheet happening. By the way, Mr. Bernanke cut interest rates to 0% by the end of 2008; but the stock market still didn't bottom until March of 2009. Again, this proves that monetary policies work with a long lag; as the cutting of rates by 525bps over the course of 15 months still did not bring the bear market to an end. Hence, these lagged monetary effects are the same reasons why the insidious ramifications of this record-setting tightening regime have only just begun to be felt in the economy and markets. After all, it is only 9 months old and the M2 money supply is already shrinking. The complete reversal of the massive monetary impulses that produced record asset bubbles in equity, real estate and the fixed income markets should lead to one of the most acute recessions in history. What other outcome would you expect, given the fact that near zero percent interest rates, which have existed for 10 of the last 14 years, will have surged to 5% in just one year’s timeframe. For reemphasize the point, it took a one percent Fed Funds Rate for the duration of just one year to engender the housing bubble and Great Recession. And even though interest rates were gradually raised by 425 bps over three years, the results were still disastrous. That grand reconciliation of asset prices and the economy has yet to fully materialize; but it is indelibly on the schedule for 2023.

EUR/USD Current Price: 1.0601 EU S&P Global Services PMIs were upwardly revised for December, providing mild support to the EUR. The US FOMC Meeting Minutes showed that policymakers are still concerned about inflation. EUR/USD lacks bullish strength as it struggles to retain the 1.0600 threshold. The EUR/USD pair changed course once again and finished the day on the positive side at around 1.0600. The US Dollar came under selling pressure during Asian trading hours amid resurgent optimism fueling demand for high-yielding assets. The focus was once again on China, and the potential economic recovery the country will experience after dropping its zero-covid policy. Headlines suggesting China will resume imports of Australian coal were the initial catalyst of the US Dollar decline. The pair topped during European hours at 1.0635, spending the rest of the day at around 1.0600, as investors await the FOMC Meeting Minutes. The document showed that policymakers remain concerned about inflation risks, and while they welcomed easing price pressures in October and November, are still taking monetary policy decisions on the base of price pressures. There were no clues on the extent of a potential February rate hike. Following the release of the document, the EUR/USD pair eased modestly but remains around the aforementioned threshold. On the data front, S&P Global published the final estimates of its December PMIs. The German Services PMI was upwardly reported to 49, while that for the Euro Zone was confirmed at 49.8,  suggesting the EU has left the worst behind. The reports indicated that price pressures remained elevated but retreated further from their recent peaks. The encouraging news provided mild support to the EUR. The United States December ISM Manufacturing PMI shows that business output contracted by more than anticipated in December, as the index printed at 48.4, missing expectations of 48.5 and below the previous 49. On a positive note, the November JOLTS Job Openings report showed demand for employment remained high as 10.46 million positions were available in the month. On Thursday, Germany will publish the November Trade Balance, while the Euro Zone will release the Producer Price Index for the same month. In the US, the focus will be on employment, as the country will release the ADP Employment Change report ahead of the Nonfarm Payrolls one on Friday, and the usual weekly unemployment figures. EUR/USD short-term technical outlook The daily chart for the EUR/USD pair shows that it trades around its 20 Simple Moving Average (SMA) while the 100 and 200 SMAs remain directionless well below the shorter one. At the same time, the Momentum indicator remains flat below its 100 level, while the Relative Strength Index (RSI) gains upward traction within neutral levels. Overall, the risk skews to the upside as long as the pair holds above the 23.6% Fibonacci retracement of the September/December rally at 1.0450. According to the 4-hour chart,  the chance of a bullish extension remains limited. A bearish 20 SMA contained advances, providing dynamic resistance at around 1.0640. The 100 SMA stands directionless a few pips below the shorter one, reinforcing the resistance area. Finally, technical indicators remain directionless within negative levels, skewing the risk to the downside without confirming it. Support levels: 1.0560 1.0510 1.0450 Resistance levels: 1.0640 1.0695 1.0740 View Live Chart for the EUR/USD

Join Senior Market Strategist & Trading Mentor Duncan Cooper as he watches price levels on the EURUSD weekly, daily, 4-hour, and 15-minute charts.

2022 was a year of profound transformation, of shifting geopolitical and economic paradigms. Looking ahead, 2023 should see a change of direction in key economic variables. Headline inflation should decline significantly, central bank rates should reach their cyclical peak and the US and the euro area should spend part of the year in recession. 2023 can be considered as a year of transition, paving the way for more disinflation, gradual rate cuts and a soft recovery in 2024. The traditional year-end reviews have reminded us of the exceptional nature of the past year: the war in Ukraine, the energy and food price shock, huge labour market bottlenecks, inflation reaching a multiple of what central banks are targeting, thereby triggering a ‘whatever it costs’ approach to monetary tightening, etc. 2022 was a year of profound transformation, of shifting paradigms, not only geopolitically but also economically. Looking ahead, 2023 should see a change of direction in key economic variables. Headline inflation should decline significantly, largely due to favourable base effects and an easing of supply pressures. Central bank rates should reach their cyclical peak. Initially, the Federal Reserve and the ECB should continue hiking their policy rates, but subsequently -probably in spring- their monetary stance should be sufficiently tight, allowing them to switch to a wait-and-see attitude and monitor how the economy is reacting to past hikes, before deciding on the next step. Finally, the US and the euro area should spend part of the year in recession. This can be considered as the price to be paid to bring inflation back under control through tight monetary policy. Recessions are disinflationary because subdued demand reduces the pricing power of companies and slows down wage growth. It means that 2023 can be considered as a year of transition, paving the way for a gradual normalization in 2024. Normalization in terms of a significant narrowing of the gap between observed and target inflation, enabling central banks to start cutting interest rates, probably in the first half of 2024. This prospect should support investor risk appetite and boost confidence of households and firms, thereby contributing to the economic recovery. Although these broad trends look like very likely, the devil is in the detail. The transition in 2023 might be bumpier than expected. The base scenario is for a short and shallow recession because of several factors of resilience1 but the contraction might be bigger than anticipated. Possible causes could be a new, significant and lasting increase in the price of gas or a slower than expected decline in inflation, which could fuel concerns of interest rates moving higher, thereby hitting demand. Past rate hikes could also have a bigger than expected impact, particularly on the housing market and credit conditions. Another issue concerns the normalization in 2024: how will it look like? The question matters because expectations about the nature of the recovery will influence decisions by firms and households this year. The list of recovery drivers is long2, but we nevertheless expect the recovery to be soft for at least two reasons. Traditionally, central banks cut interest rates aggressively as the economy enters a recession, but in this cycle inflation will still be too high. Rate cuts should come later and be more gradual than normal due to the slow decline in core inflation. This means less of a boost to final demand. Another factor is labour hoarding. Companies have been struggling to fill vacancies, which will probably make them reluctant to lay off staff during a recession3. However, this also would imply a slow increase in employment during the recovery. Download The Full Eco Flash

The Fed has raised rates 7 times in a row, and the consensus among analysts is that it will do so again at the end of the month. At the moment, the majority of economics expect a 25bps hike, which would continue the "leveling off" trend from the Fed. But, after the last meeting, Fed Chair Powell was adamant that rates would keep going up, and that the market was misreading the Fed's attention. This hawkish tone didn't have as much impact on the markets after the Fed raised at a slower pace. And it's a scenario we've seen play out before, with Powell and the minutes of the meeting not exactly being in line. Which is why there could be some riling up in the markets tomorrow with the release of the minutes. Some analysts are wondering if there will be a repeat. What could happen again… Back in November, there was quite a bit of discussion about when the Fed would pivot. There was expectation that following that month's FOMC meeting, Powell would drop some hints that the next meeting would have a smaller rate hike. Instead, he came out quite adamant that rates would keep going up. But, two weeks later, the FOMC minutes came out, and were decidedly more dovish. And the Fed did ultimately make a smaller raise at the next meeting in December. Given the hawkish tone out of Powell following the last meeting, and the general market expecting the Fed to level off rates now, there is speculation that the minutes this time around could be more dovish. Market reaction and surprises The minutes could have an even bigger impact this time around, because FOMC members have been largely silent since the meeting. Of course, the last couple of weeks have been the year-end holidays, so it's expected that there wouldn't be much Fed commentary. Now, traders are looking to set up for the coming year, and the minutes are the first explanation of what the Fed is thinking about the current inflation trends. The thing is, Powell wasn't the only hawkish sign from the last meeting. We also got the quarterly update with the dot-plot matrix, which shows where members see policy rates in the coming months. And there, the median rate expectation was boosted from 4.5% to 5.0%, meaning that the consensus among Fed members is more hawkish than it was at the end of the third quarter. Figuring out where things are going The market is currently pricing in a terminal rate of under 5.0%, while the Fed is insisting that the terminal rate will be over 5.0%. Who turns out to be right will likely depend on the data, but it doesn't take much for the Fed to prove the market wrong. With rates at 4.5% at the moment, all the Fed would have to do is raise rates by 50bps at the next meeting, repeating what they did in December, and the market would have to adjust. Almost a third of economists are forecasting that, as a matter of fact. The takeaway from the minutes, therefore, is likely to be around how confident the members sound in their projection that rate hikes will keep coming. If they emphasize being more data dependent than anchoring expectations, then the market might believe them to be more dovish than Powell communicated most recently.

EUR/USD has gone into a consolidation phase following Thursday's rebound. Trading action is likely to remain subdued on the last trading day of 2022. 1.0680 aligns as immediate resistance for the pair. EUR/USD has lost its bullish momentum and retreated to the 1.0650 area after having registered modest gains on Thursday. In the absence of high-impact macroeconomic data releases, investors are unlikely to commit to large positions on the last trading day of the year. Hence, EUR/USD should continue to fluctuate in its weekly range. The positive shift witnessed in the risk mood on Thursday made it difficult for the US Dollar to find demand and helped EUR/USD push higher. Bargain shopping ahead of the New Year holiday may have triggered the rally in Wall Street's main indexes as there were no apparent fundamental drivers that could have impacted the sentiment in a significant way. On Friday, the only data from the euro area revealed that the Harmonized Index of Consumer Prices in Spain declined to 5.6% on a yearly basis in December's flash reading from 6.7% in November. This data, however, failed to influence the Euro's performance against its rivals in a noticeable way. The ISM Chigao's Purchasing Managers Index for December will be the only data featured in the US economic docket. US stock index futures are down between 0.25% and 0.5%, suggesting that the US Dollar could hold its ground in the second half of the day in case the mood sours. Nevertheless, with the US bond markets closing early on Friday, it wouldn't be surprising to see choppy action in EUR/USD. EUR/USD Technical Analysis EUR/USD's action on Thursday confirmed 1.0680 (static level, end-point of the latest uptrend) as strong resistance ahead of 1.0700 (psychological level) and 1.0735 (December 15 high). On the downside, 1.0625 (50-period Simple Moving Average (SMA)) aligns as first support before 1.0600 (100-period SMA). A four-hour close below the latter could attract sellers and open the door for an extended slide toward 1.0580 (Fibonacci 23.6% retracement) and 1.0500 (psychological level, 200-period SMA).

There's no question, 2022 will go down in history as one of the most profitable years ever for commodity traders, however 2023 is projected to be even bigger! This is now the second consecutive year that has seen a total of 27 commodities ranging from the metals, energies to agriculture tallying up astronomical double to triple digit gains – outperforming every other asset class out there! According Goldman Sachs, the macroeconomic backdrop for Commodities in 2023 is looking more bullish than ever before in history – ultimately indicating that we could be on the verge of another record-setting year ahead. In a note to clients, the bank's analysts wrote that "underinvestment in new capacity, economic stagflation, China's reopening, coupled with a slowing of global central bank rate hikes, leading to the eventual end of rate hikes next year and signs of a dollar peak will power monumental gains across the entire Commodities complex". The bank's analysts went on to say that "the setup for Commodities in 2023 is more bullish than it has ever been since they first highlighted the Supercycle in late 2020". The Wall Street bank concluded by reconfirming their view that "we're still only at the first inning of a multi-year, potentially decade-long Commodities Supercycle". The last time Commodities significantly outperformed every other class – over a series of consecutive back-to-back years – was during the previous two Supercycles in the 1970s and the 2000s. History suggests we are now at the forefront of a third Commodities Supercycle – which also brings with it one of the biggest wealth creation opportunities the world has seen. And they are certainly not alone with their bullish outlook. We are beginning to see more and more of the world's most powerful financial institutions releasing their 2023  forecasts – with "extremely bullish" calls for Commodity prices to hit fresh record highs in the year ahead as the Supercycle continues to gather massive momentum. Last week JP Morgan, Citigroup and Morgan Stanley – also joined the list with their outlook that 2023 is set to be another blockbuster year for Commodities due to all the macroeconomic events that are currently unfolding. Extraordinary times create extraordinary opportunities and right now, as traders we are amidst one of the greatest eras of wealth creation the world has seen. Whichever way you look at it, the case for Commodities in a well-diversified portfolio has never been more obvious than it is right now! Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

EUR/USD Current Price: 1.0639 New coronavirus-related concerns undermine the market mood in thin trading. EU November M3 Money Supply rose 4.8% YoY, beating expectations. EUR/USD is losing upward momentum, but bears are nowhere to be found. The EUR/USD pair keeps trading within familiar levels on Thursday, bottoming during the Asian session at 1.0605 and peaking during European hours at 1.0657. Trading remains choppy amid a scarce economic calendar and due to the winter holidays in the Northern Hemisphere, although the market sentiment continues to deteriorate. The latest news from China does not seem encouraging as the number of coronavirus cases has multiplied while the government moves away from its zero-covid policy. Italy reported that roughly 50% of the passengers of two flights arriving in Milan on Wednesday tested positive for COVID-19, and several western nations rushed to impose control on Chinese travellers, fearing a new strain could break the delicate balance in which they are living. It is still to be seen whether these latest developments will have long-lasting effects on growth and inflation. Meanwhile, China’s State Council announced it would adjust import and export tariffs of some goods starting January 1, detailing raising export tariffs on aluminium and aluminium alloys. On the data front, the EU published November M3 Money Supply, which rose 4.8% YoY, beating expectations. The US will later release Initial Jobless Claims for the week ended December 23. EUR/USD short-term technical outlook The EUR/USD pair trades around 1.0640, with the picture unchanged from the previous updates. Technical readings in the daily chart show that the pair has lost upward momentum, although the risk remains skewed to the upside. In the mentioned time frame, the pair develops above all of its moving averages, with a bullish 20 SMA providing dynamic support at around 1.0600. The longer moving averages, in the meantime, lack directional strength far below the shorter one. Finally, technical indicators remain flat, with the Momentum just above its midline but the Relative Strength Index (RSI) holding near overbought readings. In the near term, and according to the 4-hour chart, the pair retains the neutral stance. EUR/USD develops above a mildly bullish 20 SMA, while the 100 SMA heads nowhere below it. The 200 SMA, however, maintains its bullish slope far below the latter. Technical indicators have turned south but lack enough strength and are stuck to their midlines, reflecting the absence of speculative interest. Support levels: 1.0610 1.0580 1.0535 Resistance levels: 1.0660 1.0695 1.0740   View Live Chart for the EUR/USD 

US stocks are trading markedly higher on Thursday as sentiment rebounds on the back of higher-than-expected weekly jobless claims -- amidst little liquidity on the final days of trading for this year. Indeed it's back to the ole faithful; "bad news is good." Investors are heaving a sigh of relief on the penultimate trading day of 2022, with stocks recovering much of the losses we've seen over the past few sessions. Considering the market news was sparse, the shift higher has the hallmarks of a dead cat bounce. Still, by the same token, what little information we have had -- namely, the weekly jobless claims -- especially with investors devoid of holiday cheer, could be just what the markets doctor ordered to close out the year on a slightly better note.  Coming on the heels of last week's relatively benign PCE print, investors may be taking solace in this week's Goldilocks jobless claims as it suggests that the labour market is cooling, which is necessary to curb inflation. Even though most don't see Captain Sully in Chair Powell, with very few anticipating a soft landing, a cooling labour market, and lower inflation, suggest that the Fed is on a suitable glide path. Keeping in mind that the flight plan is still very high altitude  Turning our focus back to markets, the long-duration sections are all up more than 2%. However, how much does this have to do with year-end housekeeping dynamics, especially with the hopelessly skewed signal-to-noise ratio in favour of noise? Thursday's price action was more likely just a product of illiquidity and other year-end dynamics. One piece of actually constructive news, or non-news, was the absence of any negative headlines from locales where Chinese travellers are arriving fresh from three years of forced travel hiatus. OIL  As we saw in oil markets yesterday, poor liquidity can easily amplify the downside, effectively transforming a mild holiday hangover into a significant downdraft.  But unquestionably, the short-term backdrop for oil has become more challenging, especially to equate supply and demand hence price discovery with rising COVID cases in China amidst a push to reopen, combined with Russia's ban on selling oil to countries that impose a price cap.  While this adds volatility to oil prices and supports the roller-coaster narrative well into 2023, we think the slightest recovery in Chinese mobility data in January will spark a sizable rally as traders will start to see the forest from the trees confirming that Chinese demand is finally beginning to make progress on the long road to trend. As we opined yesterday, oil markets will only turn upside down if China's policy U-turns and moves back into lockdown mode. And we think this is an improbable scenario with daily peak COVID caseloads in sight. FOREX The good news for the EURO is that European gas imports via LNG tankers could hit 20 bcm for the first time in December, helping the region get through winter largely without Russian imports.

AUD/USD Current Price: 0.6782 The upbeat tone of US equities helped AUD/USD recover from a fresh weekly low. Softer-than-expected Hong Kong data weighed on the pair at the beginning of the day. AUD/USD turned bullish in the near term, next resistance at 0.6810. Asian news undermined demand for the AUD throughout the first half of the day, with AUD/USD   pressured by a risk-averse environment. The pair bottomed at 0.6709, changing courses in the last trading session of the day to post an intraday high of 0.6784. It trades a handful of pips below the latter, in line with another leg north. At the beginning of the day, the Aussie was affected by news indicating that Hong Kong's exports plunged by the most in seven decades in November, affected by diminished global demand. The headline spurred risk aversion and sent global indexes into the red. The better market mood amid US indexes' comeback underpinned AUD/USD during the American afternoon. However, Wall Street shrugged off the negative tone and picked up, putting pressure on the American currency. Data-wise, there's nothing on the Australian docket until next week.   AUDUSD short-term technical outlook The  AUD/USD pair is neutral-to-bullish according to technical readings in the daily chart. It has managed to advance above a still flat 20 SMA, while the 200 SMA maintains its bearish slope above the current level, providing dynamic resistance at around 0.6870. The Momentum indicator remains directionless at around its 100 level, while the RSI picked up, advancing at around 56. AUD/USD turned bullish in the near term. In the 4-hour chart, the pair is above all of its moving averages, with the 20 SMA advancing above the longer ones. Still, moving averages remain confined to a tight range, reflecting the absence of a clear trend. At the same time, technical indicators stand within positive levels, with the Momentum advancing and the RSI consolidating around 61. Support levels: 0.6750 0.6715 0.6670 Resistance levels: 0.6810 0.6850 0.6890 View Live Chart for the AUD/USD

We're seeing choppy trade in financial markets on Wednesday in what is always quite thin trade as traders continue the festivities into the new year. And there's certainly a strong sense of holiday trade to the markets today, with light news flow combined with lower liquidity creating choppy but ultimately insignificant moves. It very much feels like we're now just drifting into 2023 at which point I expect things will quickly pick up again. The key trading themes will continue to dominate in early January, most notably how far central banks are willing to push interest rates in order to display their determination to get inflation back to target. Many have already started easing off the brake and we're seeing plenty of signs of pressures easing, albeit perhaps not as much as policymakers would have liked by now. Still, the risks now appear very much tilted to the downside as far as hikes are concerned against the backdrop of a very aggressive tightening in a short period of time and with many countries facing recession. Having started too late, central banks are now at risk of tightening too much and therefore overcompensating for a sloppy start with a painful exit. China key to oil prices Oil prices are paring recent gains in the middle of the week, slipping more than 2% after recovering strongly over the last few weeks. The outlook remains highly uncertain for the oil market and recent sanctions by the G7 and countermeasures by the Kremlin do little to change that at the moment. Both will only be tested if crude prices rise to the point that Russian crude is trading uncomfortably close to the $60 cap or should be above, which is not the case right now. So as it is, it's all theoretical. China's success in pivoting away from zero-Covid could be key to all of this but with trustworthy data on the spread since restrictions were eased hard to come by, we may have to wait some time to fully understand the implications for the economy and therefore oil demand. ​ Holding gains for now Gold is trading around $1,800, the level it's largely fluctuated around throughout December. Whether it's a reflection of traders not buying the Fed's hawkish determination or bulls being unwilling to give up on the recovery rally, it's continuing to hang on in there, albeit on ever-weakening momentum. We could see a correction early in the new year in the absence of a dovish shift in the Fed commentary or some favourable economic data. Treading water Bitcoin has been treading water over the festive period and I'm sure the crypto community will be perfectly happy about that. It's not been an easy few months and the next few could prove to be challenging as well. It's become a matter of damage limitation for the industry and the hope that the storm has now passed with another not quickly behind it.