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Daily Pivots: (S1) 1.6441; (P) 1.6600; (R1) 1.6710; More...

EUR/AUD's pull back from 1.6800 extended lower today and intraday bias is now on the downside. Firm break of 38.2% retracement of 1.5963 to 1.6800 at 1.6480 will bring deeper fall to 61.8% retracement at 1.6283. For now, risk will stay mildly on the downside as long as 1.6800 resistance holds, in case of recovery.

In the bigger picture, EUR/AUD is holding on to 1.5996 key support despite brief breach. Larger up trend from 1.4281 (2022 low) is still in favor to resume through 1.7180 at a later stage. Nevertheless, sustained break of 1.5995 will indicate that such up trend has completed and deeper decline would be seen.

Daily Pivots: (S1) 0.9333; (P) 0.9365; (R1) 0.9401; More....

Intraday bias in EUR/CHF is back on the downside with break of 0.9359 minor support. Deeper fall should be seen to 0.9284 support next. Rebound from 0.9204 is current seen as a corrective move. In case of another rise through 0.9440, strong resistance would be seen from 0.9481 fibonacci resistance to limit upside.

In the bigger picture, a medium term bottom is probably in place at 0.9204. More consolidations would be seen above there with risk of stronger rebound to 38.2% retracement of 0.9928 to 0.9204 at 0.9481. But outlook will remain bearish as long as 0.9481 holds and another fall through 0.9204 to resume larger down trend is in favor.

According to the EUR/USD chart, on 2nd January, the first trading day of the year, the EUR/USD pair fell below the psychological level of 1.025, the lowest mark since November 2022.

There are few news events, and the EUR/USD rate decline may be attributed to:

→ The holiday period still affecting financial markets, reducing liquidity and creating vulnerabilities for volatility spikes;

→ Market participants potentially rebalancing their portfolios for the new calendar year;

→ Reassessing the strength of the dollar amid uncertainty about the actual steps of President-elect Trump, whose inauguration is scheduled for this month.

Meanwhile, technical analysis of the EUR/USD chart reveals that:

→ In 2024, price fluctuations formed a downward channel, with key pivot points marked by red circles. Notably, the previous holiday period led to the formation of the first of these points.

→ The bullish "Cup and Handle" pattern, which we discussed on 30th December, resulted in a false bullish breakout (indicated by an arrow). Seizing the bulls' failure, the bears pushed the price to the lower boundary of the mentioned channel.

The area where the lower boundary of the channel intersects the psychological level of 1.025 could serve as strong support. The recovery observed on the morning of 3rd January may confirm this.

The holiday period may lead to the formation of a new key pivot point on the EUR/USD chart, as has happened before.

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Daily Pivots: (S1) 1.4367; (P) 1.4405; (R1) 1.4440; More...

USD/CAD is staying in consolidations below 1.4466 and intraday bias remains neutral. Another retreat cannot be ruled out, but outlook will stay bullish as long as 1.4177 resistance turned support holds. On the upside, break of 1.4466 and sustained trading above 1.4391 will pave the way to retest 1.4667/89 long term resistance zone.

In the bigger picture, up trend from 1.2005 (2021) is in progress and met 61.8% projection of 1.2401 to 1.3976 from 1.3418 at 1.4391 already. Sustained trading above there will pave the way to 1.4667/89 key resistance zone (2020/2015 highs). Medium term outlook will remain bullish as long as 1.3976 resistance turned holds, even in case of deep pullback.

Daily Pivots: (S1) 0.6183; (P) 0.6203; (R1) 0.6224; More...

Intraday bias in AUD/USD remains mildly on the downside despite loss of momentum as see in 4H MACD. Current fall from 0.6941 should target .6169 long term support, and then 138.2% projection of 0.6941 to 0.6511 from 0.6687 at 0.6074. However, considering bullish convergence condition in 4H MACD, break of 0.6273 resistance will indicate short term bottoming, and turn bias back to the upside for stronger rebound.

In the bigger picture, price actions from 0.6169 (2022 low) are seen as a medium term consolidation to the down trend from 0.8006. Firm break of 0.6169 support will confirm down trend resumption for 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806 next. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6573) holds.

Daily Pivots: (S1) 156.69; (P) 157.27; (R1) 158.10; More...

Intraday bias in USD/JPY stays neutral as consolidations continue below 158.06. While another retreat cannot be ruled out, outlook will stay bullish as long as 55 D EMA (now at 153.34) holds. On the upside, above 158.06 will resume the rally from 139.57 to 61.8% projection of 139.57 to 156.74 from 148.64 at 159.25. Firm break there will pave the way back to 161.94 high.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low). The range of medium term consolidation should be set between 38.2% retracement of 102.58 to 161.94 at 139.26 and 161.94. Nevertheless, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 0.9063; (P) 0.9100; (R1) 0.9161; More…

Intraday bias in USD/CHF remains on the upside as rally from 0.8374 is in progress. Next target is 0.9223 key resistance. Strong resistance is expected there to limit upside, at least on first attempt. On the downside, below 0.9038 minor support will turn intraday bias neutral first. Nevertheless, decisive break of 0.9223 will carry larger bullish implications.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern, with rise from 0.8374 as the third leg. Overall outlook will continue to stay bearish as long as 0.9223 resistance holds. Break of 0.8332 low is in favor at a later stage when the consolidation completes. However, decisive break of 0.9223 will be an important sign of bullish trend reversal.

Daily Pivots: (S1) 1.2309; (P) 1.2425; (R1) 1.2497; More...

Intraday bias in GBP/USD remains on the downside as fall from 1.3433 is in progress for 1.2256/98 cluster support zone. Strong support is expected there to contain downside to bring rebound, at least on first attempt. On the upside, break of 1.2474 support turned resistance will turn intraday bias neutral first. However, decisive break of 1.2256/98 will carry larger bearish implications.

In the bigger picture, price actions from 1.3433 medium term are seen as correcting whole up trend from 1.0351 (2022 low). Deeper decline could be seen to 38.2% retracement of 1.0351 to 1.3433 at 1.2256, which is close to 1.2298 structural support. But strong support is expected there to bring rebound to extend the corrective pattern. However, firm break of 1.2256 will argue that the trend has reversed and target 61.8% retracement at 1.1528.

Daily Pivots: (S1) 1.0203; (P) 1.0289; (R1) 1.0353; More...

Intraday bias in EUR/USD remains on the downside at this point, as fall from 1.1213 is in progress to 1.0199 fibonacci level. Decisive break there will solidify the case of larger bearish trend reversal. Next target will be 61.8% projection of 1.1213 to 1.0330 from 1.0629 at 1.0083. On the upside, above 1.0343 support turned resistance will turn intraday bias neutral first. But outlook will now stay bearish as long as 1.0629 resistance holds, in case of recovery.

In the bigger picture, current development suggests that rebound from 0.9534 (2022 low) has already completed at 1.1274 after rejection by 55 M EMA. Deeper fall should be seen to 61.8 retracement of 0.9534 to 1.1274 at 1.0199. Sustained trading below there will pave way back to 0.9534 low. This will now remain the favored case as long as 1.0629 resistance holds.

European currencies remain on the defensive as the new trading year unfolds, with Euro struggling near its lowest level against Dollar since 2022 and Sterling hovering close to a nine-month low. Dollar, while firm, is holding steady in narrow ranges against Yen and commodity-linked currencies, with traders awaiting fresh signals from today’s ISM Manufacturing PMI.

Europe’s economic outlook has been further clouded by an energy price surge. This week, Russian natural gas flows to the EU via Ukraine ceased after the expiration of a five-year transit agreement, forcing European nations to seek pricier LNG imports elsewhere. This development adds another layer of strain to energy-reliant economies like Germany, France, and the UK, worsening their already fragile terms of trade.

US natural gas futures reflected the energy market's unease, spiking to 4.474 earlier this week before retreating. Key resistance now stands at the 38.2% retracement of 10.03 to 1.570 at 4.870. Strong resistance is expected to cap further gains for now, setting the stage for medium-term range trading above 3.024 resistance turned support. However, decisive break above 4.870 could signal significant shifts in energy market dynamics, and could prompt panic rally towards 61.8% retracement at 6.798.

Trade tensions and diverging monetary policies are adding further pressure on European currencies. US president-elect Donald Trump has once again stoked fears of a trade war, tweeting today, "Tariffs will pay off our debt and MAKE AMERICA WEALTHY AGAIN!" This statement reinforces expectations of a more aggressive US trade agenda under his administration, which takes office on January 20. European economies, already struggling with stagnant growth, could face additional headwinds if punitive tariffs are imposed on exports to the US.

The monetary policy outlook for 2025 is also weighing on market sentiment. ECB is expected to proceed with steady rate cuts, totaling around 100 bps by the summer. BoE may also reduce rates by 60 basis points this year, with the possibility of deeper cuts of 100bps if economic conditions deteriorate further. In contrast, Fed is likely to adopt a more cautious easing path, with markets pricing in fewer than 50 basis points of cuts for the year. Yesterday’s US jobless claims report, which revealed an eight-month low in initial claims, highlighted the relative resilience of the US labor market. Upcoming ISM data and non-farm payroll data will be critical in solidifying these expectations for Fed’s policy path.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.0203; (P) 1.0289; (R1) 1.0353; More...

Intraday bias in EUR/USD remains on the downside at this point, as fall from 1.1213 is in progress to 1.0199 fibonacci level. Decisive break there will solidify the case of larger bearish trend reversal. Next target will be 61.8% projection of 1.1213 to 1.0330 from 1.0629 at 1.0083. On the upside, above 1.0343 support turned resistance will turn intraday bias neutral first. But outlook will now stay bearish as long as 1.0629 resistance holds, in case of recovery.

In the bigger picture, current development suggests that rebound from 0.9534 (2022 low) has already completed at 1.1274 after rejection by 55 M EMA. Deeper fall should be seen to 61.8 retracement of 0.9534 to 1.1274 at 1.0199. Sustained trading below there will pave way back to 0.9534 low. This will now remain the favored case as long as 1.0629 resistance holds.