EUR / USD
The EUR/USD currency pair has been under downward pressure due to lower-than-expected inflation data from the Eurozone, which has led to speculation about further rate cuts by the European Central Bank (ECB). The euro's decline below the $1.05 mark has reinforced expectations of continued ECB rate cuts, potentially weakening the euro further. Meanwhile, the U.S. dollar has rallied due to the Federal Reserve's less dovish stance for 2025, despite a 25bps rate cut yesterday, impacting the EUR/USD pair.
Technical analysis shows the pair testing a symmetrical triangle pattern, with a key pivot point at $1.05134, where a break above could signal bullish momentum. The Relative Strength Index (RSI) indicates oversold conditions, suggesting potential for a short-term rebound, yet the price remains below key moving averages.
The EUR is likely to remain under pressure in the near term.
USD / JPY
The USD/JPY currency pair is currently experiencing heightened volatility due to recent monetary policy decisions and expectations. The Bank of Japan's decision to maintain its interest rate at 0.25% has led to the yen weakening against the dollar, pushing the pair towards the 155 level. Meanwhile, the US Federal Reserve's less dovish stance has strengthened the US dollar, adding pressure on the BoJ.
Over the past day, the pair experienced a moderate upward movement, starting at approximately 153.9 and closing around 156.4, with a peak near 156.8. A bullish scenario could see the pair breaking above the resistance at 156.63, potentially targeting the all-time high of 162. Conversely, a bearish scenario might involve a retracement towards the 50-day moving average near 152.7 if the current momentum wanes.
Traders should prepare for continued volatility in the USD/JPY pair as both markets digest central bank narrative for 2025.
GBP / USD
The GBP/USD currency pair has been experiencing fluctuations influenced by recent economic data and central bank decisions. Despite UK inflation reaching an eight-month high of 2.6% in November, the pound has shown limited movement. The Bank of England is expected to maintain its benchmark rate at 4.75%, while the U.S. dollar has gained strength as traders look ahead for the Fed’s 2025 path.
Technical analysis indicates that GBP/USD is testing support levels around 1.2703, with resistance at 1.2739 and 1.2766. The pair recently experienced a notable decline, dropping to a low near 1.256, reflecting bearish momentum. The current price of 1.261 is below key moving averages, suggesting continued bearish pressure.
Overall, the GBP/USD outlook remains cautious as both central banks navigate inflationary challenges and economic uncertainties. The BOE’s decision to keep rates unchanged should keep the GBPUSD at current levels.
EUR / CHF
The EUR/CHF currency pair is currently under pressure due to the contrasting monetary policies of the European Central Bank (ECB) and the Federal Reserve. The ECB's dovish stance, characterised by multiple rate cuts, contrasts with the Fed's less dovish longer-term approach, indirectly weakening the euro against the Swiss franc.
Eurozone inflation remains below expectations, supporting the ECB's easing measures and adding to the euro's challenges. The Swiss franc's stability, as a safe-haven currency, further contributes to the downward pressure on the EUR/CHF pair.
Recently, the pair experienced a slight decline, testing a support level around 0.933, with resistance unchallenged at 0.945. Investors should watch for potential volatility driven by upcoming ECB meetings and geopolitical developments. Overall, the EUR/CHF pair may continue to face a constrained trading range amidst these economic and political factors.
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