Year-End Trading Guide: Technical Opportunities in USD/JPY, S&P 500, Gold, and Silver

Macroeconomic Background: Diverging Federal Reserve Policies

As the year-end approaches and markets enter holiday mode, the December Federal Reserve meeting minutes send mixed signals. While most officials believe that if inflation continues to decline, further rate cuts may be appropriate, there remains significant internal disagreement—some officials advocate maintaining stable interest rates for a period to observe economic prospects, indicating clear policy divergence. This uncertainty is driving the US dollar index higher and exerting downward pressure on precious metals.

USD/JPY: Potential Double Top Formation Emerges, 155.0 Becomes Key Support

Over the past six weeks, USD/JPY has repeatedly faced resistance in the 157.0-158.0 range, exhibiting classic double top characteristics with a neckline at 154.50. This pattern typically signals a risk of downward breakout.

On the downside, 155.0 still provides effective support; a decisive break below this level would signal the start of further decline. The next target would be around 152.0.

On the upside, if USD/JPY cannot effectively break through resistance at 157.0, it is likely to remain in a high-range consolidation in the short term.

Technical Reference: Support levels: 155.0, 154.5, 152.0
Resistance levels: 157.0, 158.0, 160.0

S&P 500 Index: Upward Trend Remains Resilient, 6790 Points as the Key Divide

The S&P 500 has weakened over the past three trading days, touching 6893.4 points on Tuesday, down 0.14%. However, overall, the index remains above 6790 points, indicating that the upward trend remains solid.

If the index can hold above the 6790 support, there is potential for a rebound toward 6900, challenging the 6000 level. Conversely, a break below 6790 could lead to further declines toward 6600 and even 6450.

Technical Reference: Support levels: 6800, 6600, 6450
Resistance levels: 6900, 7000, 7320

Gold: Facing Consolidation Pressure After Breaking 4300, Focus on Range Trading

Gold weakened on Wednesday, with a intraday decline of 0.49%, reaching a low of $4274, breaking below the 4300 level. Historically, gold experienced a single-day drop of over 5% on October 21, followed by a long-term correction. Currently, gold’s future trend is likely to continue consolidating at high levels, oscillating within the $4150-$4400 range.

If it further breaks below $4300, the next targets are $4200 and even $4150. To reverse the weakness, gold needs to regain above $4400 to establish positive momentum.

Technical Reference: Support levels: 4300, 4150, 4000
Resistance levels: 4400, 4500, 4620

Silver: Profit-taking Wave Arrives, Short-term Correction May Deepen

Silver performed the weakest on December 31, with a daily decline of 5.8%, falling below $72 again, with a low of $70.52. The logic behind this is that after a significant rise, investors are consolidating profits, coinciding with a critical time window, indicating that short-term correction could intensify.

Technically, if silver faces resistance at $75.0 during rebound, it may further decline toward $70, and test support at $67.0. To change the weak trend, silver needs to break above and stabilize above $75.0.

Technical Reference: Support levels: 72.0, 70.0, 67.0
Resistance levels: 75.0, 80.0, 83.7

Summary: Under the backdrop of declining market liquidity at year-end, gold and silver are showing prominent high-range consolidation features. USD/JPY and the S&P 500 are at critical pattern positions. Investors should closely monitor the effectiveness of support and resistance levels as key references for trading decisions.