High volatility continues to characterize the market during European trading on Friday (December 26, 2025). There have been no significant changes on the fundamental front. The market remains propelled by rising global geopolitical tensions following U.S. President Donald Trump’s strike against ISIS at the request of Nigerian authorities.
On another front, ongoing tensions between the U.S. and Venezuela persist, accompanied by the enforcement of U.S. sanctions on oil deliveries from Venezuela. This combination of factors is increasing market uncertainty and prompting investors to adopt a more cautious approach.
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In addition to geopolitical factors, market expectations suggest that the Federal Reserve may implement interest rate cuts two to three times in 2026, which is more aggressive than the Fed’s official projection indicating only one cut. This sentiment still influences market movements.
These sentiments will remain key drivers of the market during U.S. trading hours.
GOLD
The price of Gold (XAUUSD) surged by $51.57 or 515.7 pips to $4,531.18 per troy ounce during the European session, hitting a new all-time high.
The primary driver of this increase stems from rising global geopolitical tensions. The U.S. assault on ISIS coupled with the ongoing blockade against Venezuelan oil shipments significantly heightens market uncertainty, leading to increased demand for safe-haven assets.
Furthermore, the expectation of more aggressive interest rate cuts from the Fed next year continues to support the movement of Gold.
With this combination of sentiments, Gold prices are likely to maintain their upward momentum during U.S. trading hours.
OIL
Oil prices (CLS10) climbed $0.21 to $58.59 per barrel in the European session. Positive sentiment persists due to the ongoing U.S. blockade on Venezuelan oil shipments and damage to Russian energy infrastructure from the Ukraine conflict.
These factors constrain global oil supply and alleviate previous oversupply concerns that had pressured prices.
Given the current situation, oil prices still have the potential to continue their rise during U.S. trading hours.
EURUSD
The EURUSD pair reversed direction, declining by 113 points or 11 pips to 1.17664 during the European session. The pressure emerged after the U.S. dollar attracted short-term positive sentiment following the release of unemployment claims data on Wednesday night, indicating that the U.S. labor market remains robust.
This sentiment is likely to continue exerting pressure on the EURUSD during U.S. trading sessions.
GBPUSD
GBPUSD fell by 286 points or 28 pips to 1.34771 in European trading. The pressure experienced mirrors that of EURUSD, as the U.S. dollar gains short-term support after economic data shows the labor market remains relatively strong.
This sentiment could continue to pressure GBPUSD movements during U.S. trading hours.
USDJPY
The USDJPY pair increased by 548 points or 54.8 pips to 156.486 during the European session. This rise is driven by a strengthening U.S. dollar, which gains short-term positive sentiment from solid labor market data.
However, this strength is still somewhat limited by positive sentiment towards the yen, as the Japanese government prepares for potential interventions in the foreign exchange market.
Given these conditions, the U.S. dollar is likely to maintain its positive sentiment and could continue to support USDJPY during U.S. trading hours, albeit with less room for further gains.
NASDAQ
The Nasdaq index rose by 51 points to 25,915 during the European session. The strengthening of this technology index is still supported by market optimism regarding the Fed’s potential for more aggressive interest rate cuts in the upcoming year.
This positive sentiment is likely to continue to underpin Nasdaq movements during U.S. trading hours.
