The foreign exchange market is currently dominated by divergent monetary policy expectations between major central banks and heightened geopolitical tensions. Key risk factors include potential policy shifts from the ECB and Federal Reserve, political uncertainty in France, and the impact of President-elect Trump's proposed trade policies, particularly the threatened ...% tariffs on BRICS nations. The US Dollar Index maintains strength at ..., reflecting broader market confidence in the US economy despite mixed economic indicators.
In Europe market, EUR/USD faces continued pressure below ..., with ECB's dovish stance and political uncertainty in France weighing on sentiment. Technical indicators suggest further downside potential, with key support at ... remaining crucial for near-term direction.
For Asian, USD/JPY pair demonstrates resilient strength above ..., supported by substantial interest rate differentials and the Bank of Japan's maintained accommodative stance. Technical structure remains constructively bullish despite periodic verbal intervention from Japanese authorities.
The EUR/USD pair continues to face significant headwinds as the European Central Bank maintains its dovish policy stance, with expectations of rate cuts totaling ... basis points by June 2025. Political uncertainty in France, highlighted by a no-confidence vote threatening Prime Minister Michel Barnier's government, adds another layer of pressure on the Euro. The ECB's acknowledgment of weaker near-term growth prospects and ongoing discussions about potential rate cuts ahead of the December ... meeting further undermines the currency. Meanwhile, the US Dollar's resilience, despite softer economic data, including the ISM Services PMI dropping to ... in November, reflects the market's confidence in the Federal Reserve's policy approach and the underlying strength of the US economy.
The EUR/USD pair exhibits a decisively bearish technical structure, with price action contained below the critical ... psychological level. Significant resistance levels are established at ... coinciding with the ...-day Simple Moving Average, and ..., marking the recent weekly high. On the support side, immediate attention focuses on ..., representing the swing low in December, followed by crucial support at ..., representing the November 22 Low. A third support level exists at the psychological level of .... The Relative Strength Index hovering around ... indicates weakening momentum but remains in bearish territory. The price trajectory beneath all major moving averages, particularly the downward-sloping ...-day and ...-day Simple Moving Averages, reinforces the bearish outlook.
USD/JPY maintains its upward trajectory, driven by a significant interest rate differential between the US and Japan. The Bank of Japan's continued accommodative stance, despite inflation remaining above its ...% target, provides fundamental support for the pair. Recent commentary from Bank of Japan Governor Kazuo Ueda suggesting progress towards sustainable inflation in 2025 has been insufficient to curb yen weakness. Meanwhile, the Federal Reserve's hawkish pivot and growing uncertainties surrounding the economic policies of the incoming Trump administration, particularly regarding potential tariffs, have strengthened the US dollar. Market attention remains focused on the upcoming Bank of Japan policy decision on January ..., with the quarterly report on regional economic conditions expected to provide crucial insights into potential policy shifts.
The USD/JPY pair demonstrates sustained bullish momentum, trading prominently above the ... psychological level. Key resistance levels are positioned at ..., representing a significant technical barrier from previous price action, and ..., marking the recent weekly high. On the support side, immediate attention falls to ..., the recent daily low, followed by crucial support at ..., the psychological level. A third significant support level exists at ..., coinciding with the rising ...-day Simple Moving Average. The Relative Strength Index holding in positive territory, but below overbought conditions suggest continued bullish momentum. The price action maintaining position above major moving averages, particularly with the upward-sloping ...-day and ...-day Simple Moving Averages, reinforces the bullish outlook.
