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Forex Signals Dec 17: Upbeat Micron Earnings Review but Can It Justify?
Despite market volatility, Micron’s earnings outlook continues to strengthen as pricing power and AI-driven memory demand accelerate.
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Last updated: Wednesday, December 17, 2025
Quick overview
- Micron's earnings outlook is strengthening due to increased pricing power and AI-driven memory demand.
- The recent jobs report showed a rise in the unemployment rate to 4.6%, leading to heightened expectations for a rate cut.
- Equities faced volatility, but the Nasdaq recovered late in the session, driven by Tesla's all-time high.
- Crude oil prices fell below $55, reflecting concerns over global oversupply and adding a deflationary signal.
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MARKETS TREND
Despite market volatility, Micron’s earnings outlook continues to strengthen as pricing power and AI-driven memory demand accelerate.
Unusual Structure of the Jobs Report
Yesterday’s non-farm payrolls release stood out due to its mixed structure, combining October and November figures for the headline jobs number while reporting only November data for the unemployment rate. That distinction proved important, as the unemployment rate drew the most attention, rising to 4.6% from 4.4%.
Dovish Signal Lifts Rate-Cut Expectations
The uptick in unemployment triggered an initial dovish response across markets. Rate-cut expectations shifted notably, with the implied probability of a March cut climbing to 58%, up from roughly 40% ahead of the report.
Early FX Reaction Fades Quickly
In the immediate aftermath, the euro and Japanese yen advanced to session highs, reflecting the softer US labor signal. However, the move lacked durability. A sell-off in equities prompted renewed demand for the US dollar, reversing some of the early currency gains. Thin year-end liquidity also made price action more difficult to sustain.
Equity Volatility and Sentiment Warning
Equities came under pressure earlier in the session, adding to broader uncertainty. A notable backdrop was the Bank of America fund manager survey, which showed cash allocations at record lows, a potentially concerning signal given the survey’s history dating back to 1999.
Despite the earlier selling, stocks staged a late-session recovery led by the Nasdaq. Tesla was a key driver, reaching an all-time high for the first time this year and helping the Nasdaq finish the day in positive territory.
Oil Breakdown Adds Deflationary Signal
On the downside, crude oil extended its decline, breaking below the Liberation Day low of $55.12 and briefly slipping into the lower $50s. The lack of a meaningful rebound reflected fears of global oversupply and the possibility of a Russia–Ukraine ceasefire. The continued drop in oil prices adds an explicit deflationary tailwind, a development likely to be welcomed by central bankers.
Key Market Events to Watch Today: Micron Q3 Earnings
Micron Technology is under selling pressure going into results week, reflecting increased anxiety about valuations, execution risk, and near-term expectations after racing to record highs on AI-driven optimism.
Earnings Expectations Point Sharply Higher
Wall Street forecasts suggest a powerful start to Micron’s fiscal year. Consensus estimates from Visible Alpha project a 48% year-over-year jump in revenue for fiscal Q1 2026, reaching a record $12.93 billion. Adjusted earnings per share are expected to more than double to roughly $3.96, highlighting the scale of the recovery underway.
Wedbush stands out as one of the most optimistic voices, arguing that Micron is positioned to exceed even its own bullish guidance. The firm highlights accelerating pricing momentum across the memory complex as a key upside driver.
Pricing Power Lifts Margins
Improving price trends sit at the core of the bullish case. DRAM prices are forecast to climb at least 30% during the quarter, while NAND pricing is expected to rise by around 20%. A stronger product mix is amplifying these gains, pushing margins materially higher.
Wedbush estimates suggest gross margins could move toward the 60% level in coming quarters, with annual earnings potentially surpassing $30 per share by fiscal 2025. Even so, investors remain mindful that memory pricing can reverse quickly, making margin sustainability a critical metric to monitor.
HBM Becomes a Key Growth Engine
High-Bandwidth Memory is emerging as a defining pillar of Micron’s growth strategy. HBM volumes are expected to ramp in line with management targets, strengthening Micron’s competitive position against rivals such as SK Hynix and Samsung.
HBM revenue is projected to reach an $8 billion annualized run rate by Q4 2025. By early fiscal 2026, HBM could represent a revenue contribution comparable to traditional DRAM, supported by strong demand for HBM3E. Looking ahead, Micron has already sold out most of its 2026 HBM capacity, with next-generation HBM4E currently in customer qualification, reinforcing long-term visibility.
Gold Stays Above $4,200
Although demand for safe haven assets is still high, gold fell precipitously from record highs following the Fed’s most recent rate cut comments, as profit-taking was prompted by Powell’s cautious tone. Earlier this month, gold jumped above $4.3800 following the Federal Reserve’s announcement of a 25 basis point rate decrease. But the impetus soon waned, and prices dropped back to $4,004. The 20 daily SMA (gray) held as support last week and buyers returned and pushed XAU above $4,200K yesterday.
USD/JPY Returns Lower After the FOMC
Foreign exchange markets saw sharp swings. Early in the week, U.S. yield differentials and Japanese capital outflows pushed the dollar above ¥150, but disappointing U.S. jobs data triggered profit-taking, causing the USD/JPY to slide by four yen from its peak. However, the new BOJ governor the JPY has weakened and USD/JPY soared to 154 and we decided to close our buy signal for more than 80 pips as the pair found support at the 20 daily SMA (gray) and has rebounded more than 200 pips off that MA but reversed after the 25 bps rate cut from the FED.
USD/JPY – Daily Chart
Cryptocurrency Update
The 20 Daily SMA Turns Into Support for BTC
Cryptocurrencies remained highly active over the summer. Bitcoin (BTC) climbed to fresh highs of $123,000 and $124,000 in July and August, supported by institutional inflows and technical strength. However, remarks from Treasury Secretary Scott Bessent ruling out U.S. increases to BTC reserves triggered a steep pullback, sending the coin down below $105,000 before finding support at the 200 daily SMA (purple) and recovering above $115,000 but then fell toward $100K again. However over the weekend BTC started to rebound and the price climbed but reversed lower after finding resistance at the 20 daily SMA (gray) which was broken yesterday though.
BTC/USD – Daily Chart
Ethereum Faces the 50 Daily SMA
Ethereum (ETH) has been similarly strong, surging toward $4,800, its highest since 2021 and near its all-time peak of $4,860. Despite a dip last week, ETH found support at the 20-day SMA, with retail enthusiasm and renewed institutional participation driving fresh upside momentum. Last week we saw a dive below $2.700 but the 200 weekly SMA held as support and we’re seeing a rebound but buyers face the 50 SMA (yellow) now.
ETH/USD – Daily Char
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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