Initial jobless claims in the United States were recorded at 214,000 for the week ending December 19. This is lower than the expected 223,000 and suggests a steady labour market.
The USD/CAD currency pair is near five-month lows, influenced by the differing policies of the Bank of Canada and the Federal Reserve. Gold prices have retreated from their recent highs, affected by profit-taking in a quieter trading environment.
The Gbp Usd Pair
The GBP/USD pair experienced a slight slip due to reduced market activity during the holiday period, maintaining a range around 1.3500. Bitcoin is trading at approximately $86,770, amid increased outflows from US-listed ETFs and decreased participation from large traders, known as whales.
Expectations for 2026 suggest a solid performance in advanced economies, with supportive factors from 2025 likely to persist. Meanwhile, Avalanche’s market performance is under pressure as Grayscale files an updated form for an ETF conversion with the US SEC.
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The recent jobless claims data from December 19, showing 214,000 new claims, was stronger than anyone expected. This suggests the labor market is holding up well, which complicates the timing for the Federal Reserve’s expected rate cuts in 2026. Given that the market has been consistently pricing in an aggressive easing cycle, we should use options to protect against any hawkish surprise from the Fed in the new year.
Gold Market Trends
We’re seeing gold pull back below $4,500 after hitting all-time highs, which is typical profit-taking in a low-volume holiday market. The underlying support from a weak U.S. Dollar remains firmly in place, especially as the Dollar Index (DXY) has struggled to stay above 95 for the past quarter. We should view any further dips towards the $4,450 level as buying opportunities, as the path of least resistance is still higher heading into 2026.
With the S&P 500 hovering near its recent peak of 6,150, the bullish long-term outlook for 2026 remains intact. However, trading is extremely thin right now, which means any small order can cause an outsized move. We should be cautious about chasing new highs this week and instead consider selling some short-dated covered calls to generate income while we wait for trading volumes to return in January.
The divergence between the Bank of Canada and the Fed is becoming more pronounced, pushing USD/CAD to five-month lows. While U.S. inflation has cooled to near 2.5%, the latest Canadian CPI report from last week showed inflation remains stubbornly above 3.0%, suggesting the BoC will be slower to cut rates than the Fed. This trend supports staying short on the U.S. dollar against the Canadian loonie.
Bitcoin’s slip below $87,000 is directly tied to the four straight days of outflows from the major spot ETFs, totaling over $188 million this week alone. This reverses the strong inflow trend we saw for most of the second half of 2025 and indicates large players are taking profits before closing their books for the year. We can expect this weakness to continue until liquidity returns, presenting a potential opportunity to buy protection or short the market into early January.
