Sample Category Title

GBP/USD is attempting a recovery wave above the 1.2600 resistance. EUR/GBP declined steadily below the 0.8340 and 0.8330 support levels.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

• The British Pound is attempting a fresh increase above 1.2620.
• There is a key bullish trend line forming with support near 1.2680 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP is trading in a bearish zone below the 0.8330 pivot level.
• There is a connecting bearish trend line forming with resistance near 0.8305 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair declined after it failed to clear the 1.3000 resistance. As mentioned in the previous analysis, the British Pound even traded below the 1.2800 support against the US Dollar.

Finally, the pair tested the 1.2500 zone and is currently attempting a fresh increase. The bulls were able to push the pair above the 50-hour simple moving average and 1.2600. The pair even climbed above the 1.2700 level.

A high was formed at 1.2749 and the pair is now consolidating gains. There was a move below the 23.6% Fib retracement level of the upward move from the 1.2506 swing low to the 1.2749 high.

On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.2720. The next major resistance is near 1.2750. A close above the 1.2750 resistance zone could open the doors for a move toward 1.2800. Any more gains might send GBP/USD toward 1.2880.

On the downside, there is a bullish trend line forming with support at 1.2680. If there is a downside break below 1.2680, the pair could accelerate lower. The first major support is near the 1.2630 level and the 50% Fib retracement level of the upward move from the 1.2506 swing low to the 1.2749 high.

The next key support is seen near 1.2600, below which the pair could test 1.2570. Any more losses could lead the pair toward the 1.2510 support.

EUR/GBP Technical Analysis

On the hourly chart of EUR/GBP at FXOpen, the pair started a fresh decline from well above 0.8350. The Euro traded below the 0.8320 and 0.8320 support levels against the British Pound.

The EUR/GBP chart suggests that the pair even declined below the 0.8300 level and tested 0.8290. It is now consolidating losses and trading below the 50-hour simple moving average. The pair is now facing resistance near the 23.6% Fib retracement level of the downward move from the 0.8364 swing high to the 0.8289 low.

There is also a connecting bearish trend line forming with resistance near 0.8305. The next major resistance could be 0.8330. It coincides with the 50% Fib retracement level of the downward move from the 0.8364 swing high to the 0.8289 low.

The main resistance is near the 0.8340 zone. A close above the 0.8340 level might accelerate gains. In the stated case, the bulls may perhaps aim for a test of 0.8365. Any more gains might send the pair toward the 0.8400 level.

Immediate support sits near 0.8290. The next major support is near 0.8265. A downside break below the 0.8265 support might call for more downsides. In the stated case, the pair could drop toward the 0.8240 support level.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latvia’s ECB Governing Council member Martins Kazaks indicated his support for an interest rate cut at next week’s ECB meeting, citing the belief that inflation problem "will soon end."

However, Kazaks acknowledged the high level of uncertainty following the widely expected rate cut. He pointed to risks tied to US President-elect Donald Trump’s upcoming administration, noting that new tariffs could further weigh on Europe’s economy.

Despite these concerns, Kazaks maintained a cautiously optimistic view, stating that "Europe’s economy is going from its lowest point upwards."

In an interview with the Financial Times, ECB Chief Economist Philip Lane indicated that the central is preparing to adjust its monetary policy approach as inflation moves closer to the 2% target.

While acknowledging that inflation has fallen near the desired level, Lane noted that "there is a little bit of distance to go," especially with services inflation needing further reduction.

However, Lane emphasized that once the disinflation process is complete, monetary policy decisions will need to become "essentially forward-looking," focusing on upcoming risks rather than relying on past data. He highlighted the importance of scanning the horizon for "new shocks" that could impact inflation pressures.

Over the course of next year, Lane expects a "transition to a more sustainable neighborhood of 2%," signifying a shift from combating high inflation to maintaining price stability on a sustainable basis.

Markets

The front end of the European yield curve outperformed going into the weekend. Rates dropped almost 5 bps in the 2-yr German tenor, enough to lose the symbolical 2% barrier to close at a 2-year low. It followed European inflation numbers coming in at the expected 2.3% headline, which prompted ECB’s de Guindos and Villeroy but also Nagel downplaying the acceleration above 2%. Core inflation missed the bar slightly with an October-matching 2.7% instead of 2.8% expected. The ECB’s chief economist Lane in a podcast with the Financial Times talked about the matter and the implications for monetary policy. In comments recorded prior to the CPI release Lane said once inflation was sure to return to 2%, the ECB needs “to be driven by upcoming risks rather than being backward-looking”. He refrained from giving time specifics but it suggests the central bank may already change some of its wording in the December policy statement so that “data dependence falls down in priority”. US yields were headed south as well. Net daily changes varied between 7.6 and 9.4 bps but we wouldn’t read too much into it. The US trading session was a shortened one due to Black Friday. The traditional start of the holiday shopping season was a strong one with sales growing at a faster pace this year. Joe Sixpack to the economy is a gift that keeps on giving. The dollar underperformed in currency markets, a product of falling yields and stock optimism. JPY was able to make the most out of it, thanks to consensus-beating Tokyo inflation numbers. USD/JPY dropped below 150. EUR/USD stranded just shy of 1.06 before going in reverse again this morning towards 1.052. French politics are once again cause of concern. Le Pen over the weekend said PM Barnier needs to amend the budget to some of the RN’s demands by today or have her Rassemblement National supporting a no-confidence motion. The finance minister Armand responded in a Bloomberg interview in early Asian trading by saying they won’t be blackmailed and don’t take ultimatums. French OAT futures currently tank, yields prepare for a sharply higher open. Spreads vs swap and German Bund are bound to rise. Watch out for French yields to surpass those in Greece. Last week was a dress rehearsal. The French theme will keep yields and the especially the euro in a tight spot at the very minimum in a daily perspective but more likely for the next two weeks going into December 12, when parliament gets to vote on the budget for a last time. In the US the monthly economic update kicks off with the manufacturing ISM today, followed by the services gauge and ADP job report on Wednesday and the official payrolls report on Friday. Fed’s Waller speech at "Building a Better Fed Framework: The AIER Monetary Conference" tonight is worth mentioning.

News & Views

Rating agency Moody’s on Friday changed Hungary’s credit rating outlook to negative from stable. The rating was maintained at Baa2. It reflects the agency’s assessment related to risks related to the quality of Hungary’s institutions and governance. The country may ultimately lose out on a substantial amount of EU funds because it doesn’t meet the conditions for the release. Moody’s thinks this could also lower trend GDP growth and weaken fiscal and debt metrics. As this happens in a context of weak growth in Germany, an important trading partner, this could amplify the negative pressure on the economy. Moody’s mentions a potential sharp increase in government spending ahead of the 2026 parliamentary elections. The rating agency still sees a partial reversal in 2025 of the weakening in debt affordability from the past two years. At the same it mentions institutional weakness weighing on the debt profile, including in adherence to the rule of law, interference in civil society and concerns over central bank independence and monetary policy. The agency sees growth returning to an average of 3.0% in the 2026-28 period.

GDP growth in India slowed to 5.4% Y/Y from 6.7% Y/Y in Q3. Expectations were for a 6.5% Y/Y growth. Growth in the agricultural sector held up fairly well (3.5% Y/Y from 2.0%) but mining contracted 0.1%. Manufacturing slowed from 7.0% to 2.2% and growth in the sectors of electricity, gas and water (3.3%), construction (7.7% from 10.5%) and financial services/real estate (6.7%) were lower than Q2. On the demand side, private consumption growth slowed from 7.4% Y/Y to 6.0%, as did growth capital formation (5.4% from 7.5%). The disappointing growth performance might pressure the RBI of India not to wait too long with its easing cycle. The bank has kept its policy rate unchanged at 6.50% since February 2023. The rupee is setting new all-time lows against the dollar this morning (USD/INR 84.68).

Daily Pivots: (S1) 1.3973; (P) 1.4010; (R1) 1.4038; More...

Intraday bias in USD/CAD remains neutral as range trading continues. Further rally is expected with 1.3930 support intact. On the upside, firm break of 1.4177 will resume larger up trend towards 1.4391 projection level. However, break of 1.3926 will turn bias to the downside for deeper pullback to 55 D EMA (now at 1.3857).

In the bigger picture, up trend from 1.2005 (2021) is resuming with break of 1.3976 key resistance (2022 high). Next target is 61.8% projection of 1.2401 to 1.3976 from 1.3418 at 1.4391. Now, medium term outlook will remain bullish as long as 1.3418 support holds, even in case of deep pullback.

Daily Pivots: (S1) 0.6485; (P) 0.6506; (R1) 0.6533; More...

Range trading continues in AUD/USD and outlook is unchanged. Intraday bias remains neutral first and with 0.6549 resistance intact, further decline is expected. On the downside, break of 0.6433 will resume whole decline from 0.6941, and target 0.6348 support next. However, firm break of 0.6549 will indicate short term bottoming, and bring stronger rebound to 55 D EMA (now at 0.6602).

In the bigger picture, rise from 0.6269 (2023 low) should have completed with three waves up to 0.6941. Corrective pattern from 0.6169 (2022 low) is now extending with another falling leg. Deeper decline would be seen back to 0.6269 as sideway trading extends.

Daily Pivots: (S1) 148.89; (P) 150.30; (R1) 151.13; More...

Intraday bias in USD/JPY stays on the downside at this point. Sustained trading below 38.2% retracement of 139.57 to 156.74 at 150.18 will argue that whole rise from 139.57 could have completed. Deeper fall should then be seen to 61.8% retracement at 146.12 next. On the upside, break of 151.94 will turn bias back to the upside for stronger rebound instead.

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) 0.8792; (P) 0.8815; (R1) 0.8834; More…

Intraday bias in USD/CHF remains neutral and outlook is unchanged. With 0.8800 support intact, further rally remains in favor. On the upside, break of 0.8956 will resume the rally from 0.8374, and target 0.9223 key resistance next. However, firm break of 0.8800 will confirm short term topping and turn bias back to the downside for 55 D EMA (now at 0.8725).

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern. Rise from 0.8374 is seen 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.

Daily Pivots: (S1) 1.2687; (P) 1.2719; (R1) 1.2765; More...

Intraday bias in GBP/USD is turned neutral first with recovery from 1.2486 losing momentum. While another rise cannot be ruled out, outlook will stay bearish as long as 55 D EMA (now at 1.2867) holds. Below 1.2615 minor support will turn intraday bias back to the downside for retesting 1.2486. Break there will resume whole fall from 1.3433.

In the bigger picture, a medium term top should be in place at 1.3433, and price actions from there are correcting whole up trend from 1.0351 (2022 low). Deeper decline is now expected as long as 55 D EMA (now at 1.2867) holds, to 38.2% retracement of 1.0351 to 1.3433 at 1.2256, which is close to 1.2298 structural support. Strong support should be seen there to bring rebound.

December doesn’t arrive with chocolate and flowers to Europe. First, Stellantis CEO resigns on weaker sales and tumbling profits. Second, VW workers are expected to walk out as early as today, because their labour leaders couldn’t reach an agreement on how to reduce costs to prevent factory closures. Sadly for VW, the worker walkouts may only get the matters worse when there is no money flowing in to make everyone happy. And finally, the French political scene remains messy with the far-right party Marine Le Pen threatening to team up with the leftist and take down Michel Barnier’s government by Wednesday if he doesn’t come up with a less strict budget plan. The problem is that no plan will be good enough to satisfy Le Pen and reduce France’s budget deficit.

As a result, the European futures are in the red at the time of writing, the French yields will probably retrace last Thursday, Friday’s decline, the spread between the German and French yield could shoot above 100bp and the euro is under pressure. The EURGBP starts the new week with a move below the 0.83 level and the EURUSD has potential to break below the 1.05 support on the back of an unsupportive political and economic setup.

One good news for France, though: S&P reaffirmed its AA- debt rating.

In Japan, the news are not brighter. Nissan’s CFO decided to step down as the company now expects its operating income for this fiscal year to be 70% lower than its previous forecast. Beyond Nissan, the Japanese manufacturing PMI fell to the lowest level since March, marking the 5th consecutive month of contraction on sustainably low new orders and weak domestic and international demand. The news gives the USDJPY a good reason to rebound back above the 150 level this morning, retracing a part of last week gains triggered by rising bets that the Bank of Japan (BoJ) would hike the interest rates one more time before the year ends.

The downside pressure on euro and the yen is giving a boost to the US dollar early this week. The US dollar index is up and above the 106 this morning after retracing a part of its recent gains last week. Data-wise, last week printed a relatively strong 2.8% growth for Q3, with strong 3% growth in sales. The data showed that the price pressures last quarter declined, but the core PCE index in October ticked higher from 2.7% to 2.8% - happily, that was already priced in. Consequently, the picture painted by the latest economic data doesn’t necessarily call for another 25bp in December, but this is what the markets are pricing in right now. The US 2-year yield spent last week sliding, while activity on Fed funds futures gives around 68% probability for another 25bp in December. Note, however, that the latter expectation could change with a set of stronger-than-expected jobs and CPI data before the last FOMC decision of the year.

This week, the US will reveal the November jobs data and the expectations are mixed. The US economy is expected to have added 200K new nonfarm jobs last month, after the meagre 12K printed a month earlier due to hurricanes. The unemployment rate on the other hand is expected to have deteriorated to 4.2%, from 4.1% printed a month earlier, and the wages growth may have slightly eased from 0.4% to 0.3% on a monthly basis. Given the hurricane disruption, the unemployment rate and the wages growth will give us a more reliable information on the medium term trend than the NFP number itself. Strong data will certainly revive the rate-cut-or-not discussions, while soft numbers will boost appetite for another 25bp cut from the Fed and could limit the dollar’s upside potential.

In equities, last week, and last month, ended on a positive note for the major US indices. The S&P500 and the Dow Jones hit a fresh record on Friday, Nasdaq also gained 0.90%. The small and mid-caps consolidated near ATH as well. The European Stoxx 600 attempted a recovery on expectation that the European Central Bank (ECB) will cut thoroughly to give support to the struggling European economies, and to counter the US tariff threats, yet claiming fresh record highs with such a long list of unfavourable factors sounds unreasonable. Even less so as the ECB rate cut bets are pressured by the recent uptick in European inflation – and the USD’s recent strength is not promising. Note however that some investors like the growing valuation gap between the American and the European stocks and bet that the things can only get better for the Europeans.

In energy, crude is supported by a better-than-expected Caixin manufacturing number, and hope that OPEC+ will announce - or maybe scrap - its plans to restore production next year to avoid adding to the global glut and pressuring prices lower. The barrel of US crude finds buyers below $69pb, while Brent is bid below the $72pb. OPEC could give a positive spin to oil prices this week, therefore, the short-term risks remain tilted to the upside until the December 5th announcement, but OPEC alone will hardly reverse the medium-term bearish pressures if the demand side of the equation doesn’t improve. Therefore, any price rallies in oil could be interesting top selling opportunities for medium-term bears.