The Week in FX and Crypto: December 2, 2025

In This Issue

• USD Index: Failed break follow-through (nearly 100-point reversal)

• AUD/USD: Bullish reversal played out (0.6559 hit)

• GBP/AUD: Clean rejection at channel top

• BTC: Where to next

• Deep Dive: How to Spot a Failed Break Before It Happens (Process Breakdown)

Market Structure Update

Last week reinforced a simple theme: structure shifted before momentum did — and the USD’s failed breakout, AUD’s follow-through, and GBP/AUD’s turn all fit that same pattern.

USD Index (DXY) Bearish divergence to start the week and then dropped 90 points from high.

EUR/USD positive momentum continued throughout the week finishing near the weekly high.

GBP/AUD Price failed at channel resistance and dropped 300 points from the high for the week.

Note: These measure market reactions from flagged levels, not trading results. Implementation varies by individual approach.

Deep Dive: How to Spot a Failed Break Before It Happens

One thing last week’s USD Index reversal reinforced: failed breaks leave a trail if you know what to look for.

Here’s the exact sequence that signaled the risk before the breakdown:

Price–Momentum Divergence
Price made a new high. Momentum didn’t confirm. That alone doesn’t guarantee a reversal — but it narrows the field.

Liquidity Grab Above Prior High
Markets don’t usually break cleanly on their first attempt. When the breakout candle immediately hesitates, that’s a clue.

No Follow-Through
The market closed back under the breakout point. Failure to attract new buyers = failed break risk spikes.

Context: Extended Into Thin Liquidity
Holiday markets often exaggerate moves.

Key point: You don’t need to predict tops. You need to recognize when the market is no longer supporting a breakout narrative.

Week Ahead

U.S. holiday flows left the USD, BTC, and ETH sitting on the back foot after last week’s failed breakout in the dollar. Both BTC and ETH are at an inflection point here — and the key sign is that downside momentum still isn’t exhausted. Even after all the selling pressure, momentum hasn’t reset, which keeps the door open for further downside unless structure shifts.

EUR/GBP

Bullish reversal on Thursday from oversold momentum. A follow‑through runs into a cluster of resistance:

• 0.8791 — 38.2% Fib

• 0.8796 — 20‑day moving average

• 0.8805 — 50% Fib

Reversal pattern negated on a close below 0.8745.

GBP/USD

Bearish reversal from overbought conditions. Key support levels below:

• 1.3181 — 38.2% Fib

• 1.3150/55 — 20‑day moving average + 50% Fib overlap

Reversal pattern negated on a close above 1.3270.

BTC Key Fibonacci Support Levels (from entire move)

Initial bounce off last week’s low faded quickly.

• 38.2% retracement: 78,098

• 50% retracement: 63,501

• 61.8% retracement: 48,693

BTC Fibonacci Resistance Levels

On a recovery bounce, these are the major Fibonacci resistance zones to monitor:

• 98,010 — 38.2% (of the most recent major leg down)

• 103,402 — 50% retracement

• 108,794 — 61.8% retracement

ETH

Trading near a key retracement zone with momentum pushing toward overbought — keeping near-term risk tilted lower unless structure stabilizes.

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MERIDIAN COMPASS • Institutional FX Intelligence

Meridian Compass is brought to you by Mark Schaefer, a quantitative portfolio manager with over 30 years experience developing and trading systematic strategies in global futures and FX at major banks and hedge funds.

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This newsletter is for educational purposes only and does not constitute investment advice, trading recommendations, or solicitation to buy or sell any financial instruments. All content represents the author's personal opinions and experiences and should not be construed as professional financial advice.

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