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EUR/USD is recovering losses from the 1.0335 zone. USD/JPY is declining and showing bearish signs below the 154.00 level.

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

• The Euro struggled to start a fresh increase and declined below the 1.0500 zone.
• There is a key contracting triangle forming with resistance at 1.0500 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY is trading in a bearish zone below the 155.00 and 154.00 levels.
• There is a major bearish trend line forming with resistance near 153.60 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh decline from the 1.0610 zone. The Euro declined below the 1.0550 and 1.0500 levels against the US Dollar.

The pair even declined below 1.0400 and the 50-hour simple moving average. Finally, it tested the 1.0335 zone. A low was formed at 1.0332 and the pair is now recovering losses. There was a move above the 1.0400 level.

The pair surpassed the 50% Fib retracement level of the downward move from the 1.0609 swing high to the 1.0332 low. On the upside, the pair is now facing resistance near 1.0500.

There is also a key contracting triangle forming with resistance at 1.0500. The next major resistance is near the 76.4% Fib retracement level of the downward move from the 1.0609 swing high to the 1.0332 low at 1.0545.

An upside break above 1.0545 could set the pace for another increase. In the stated case, the pair might rise toward 1.0610. Immediate support is near the 1.0430 level.

The next major support is at 1.0400. If there is a downside break below 1.0400, the pair could drop toward the 1.0335 support. The main support on the EUR/USD chart is near 1.0320, below which the pair could start a major decline.

USD/JPY Technical Analysis

On the hourly chart of USD/JPY at FXOpen, the pair started a steady decline from well above the 155.00 zone. The US Dollar gained bearish momentum below the 154.00 support against the Japanese Yen.

The pair even settled below the 153.60 level and the 50-hour simple moving average. A low was formed at 152.33 and the pair is now showing bearish signs. On the downside, the first major support is near 152.20.

The next major support is near the 151.50 level. If there is a close below 151.50, the pair could decline steadily. In the stated case, the pair might drop toward the 150.00 support. Any more losses might send the pair toward 148.00.

Immediate resistance on the USD/JPY chart is near the 23.6% Fib retracement level of the downward move from the 155.88 swing high to the 152.33 low.

The first major resistance is near a bearish trend line at 153.60. If there is a close above the 153.60 level and the hourly RSI moves above 50, the pair could rise toward 154.10 or the 50% Fib retracement level of the downward move from the 155.88 swing high to the 152.33 low.

The next major resistance is near 155.05, above which the pair could test 155.00 in the coming days.

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Germany’s GfK Consumer Sentiment Index fell sharply for December, dropping from -18.4 to -23.3, far below expectations of -18.8. This marks the lowest level since May 2024 (-24.0) and reflects a significant deterioration in household confidence as the year ends.

November saw economic expectations decline from 0.2 to -3.6, marking the fourth consecutive drop and the weakest level since February. Income expectations also plunged, falling from 13.7 to -3.5, while willingness to buy slipped further from -4.7 to -6.0. In contrast, willingness to save increased from 7.2 to 11.9, highlighting a defensive shift in household behavior.

“Consumer sentiment in Germany is therefore currently at a level comparable to the end of 2023,” noted Rolf Bürkl, consumer expert at NIM, adding that “consumer uncertainty has increased again recently, as evidenced by the rising willingness to save.” Bürkl highlighted several contributing factors, including rising concerns over job security due to reported job cuts, production relocations, and an uptick in insolvencies.

Full Germany Gfk consumer sentiment release here.

ECB Executive Board member Isabel Schnabel stressed the importance of a cautious approach to monetary easing, warning against shifting policy into "accommodative territory."

Speaking to Bloomberg, Schnabel stated that ECB could “gradually move toward neutral” if incoming data continue to align with the bank’s baseline projections. However, she rejected market expectations for accommodative policy, remarking, “From today’s perspective, I do not think that would be appropriate.”

Schnabel also dismissed speculation about larger rate moves, such as half-point cuts, expressing “a strong preference for a gradual approach.”

She cautioned that cutting rates prematurely, even if inflation were to fall short, could be counterproductive if deeper structural issues underlie the economic weakness.

In her view, “the costs of moving into accommodative territory could be higher than the benefits,” particularly as it would deplete policy options needed for future shocks that monetary measures could address more effectively.

Schnabel estimates the neutral interest rate to fall within the 2% to 3% range. With the deposit rate currently at 3.25% after three quarter-point cuts this year, she noted, “we may not be so far” from neutrality now.

• GBP/USD is stuck in a tight range, reflecting market indecision.
• Upcoming US data releases, including GDP and PCE data, could trigger a breakout from the range.
• The US Dollar Index’s performance will heavily influence GBP/USD’s movements.

Cable has continued to consolidate in a 100 pip range this week with yesterday a prime example of the indecision at play. GBP/USD tested both the high and low of the range before finishing the day relatively flat.

US Data Ahead and Central Bank Meetings

There has been  some respite for the GBP as the US Dollars impressive rally has also stalled this week. Despite this GBP/USD has failed to push on which could be a sign that bears may be holding the edge.

Given the lack of UK data this week, the US will be key with a slew of medium and high impact data releases scheduled. The FOMC minutes were released yesterday, with more cuts expected but ‘gradually’. No surprise really given the potential implications that may arise from a Trump Presidency.

The December Fed meeting is around 60-40 in favor of a rate cut of 25 bps but the January meeting seems to be favoring a pause. The meeting will come 9 days after Donald Trump takes office and I would think a pause would be a prudent approach given Trump’s tariff rhetoric.

Source: LSEG

Looking across the pond and the Bank of England (BoE) are expected to pause in December. This could work in favor of the GBP in the short-term but moving forward into 2025 and the BoE are likely to cut more than the Fed at present. This of course could change as more data is released and the impact of Trump’s economic policy is felt.

A batch of US data awaits later in the day with initial jobless claims and the 2nd GDP estimate. We will also get the first glimpse of PCE data as well which may shed more light on the recent rise in US PPI and CPI data. The data could once again drive GBP/USD price action but as has been the case of late, any moves are unlikely to prove sustainable.

Technical Analysis

US Dollar Index (DXY)

The Dollar Index has been interesting to monitor of late and has been a driving force for dollar denominated pairs.

The DXY is trading below the multi-month key level at 107.00 which it has done on Monday and Tuesday this week. However, the index has failed to close below this level which has been key to keeping bulls interested.

The daily candle close today will be key with a close below this level likely to lead to further downside. It is key to monitor the US data as this could be key to where the DXY ends the day.

US Dollar Index (DXY) Daily Chart, November 27, 2024

Source:TradingView.com

GBP/USD

From a technical standpoint, GBP/USD has been stuck in a 100 pip range for the last four days. Price is making a move to the upside at the moment but acceptance above the range high at 1.2618 is needed for further upside to materialize.

A move above this key level opens up a test of resistance at 1.2681 and 1.2750. Looking further and we have the 200-day MA at 1.2819.

A rejection and a move lower from these levels faces support at the 1.2500 psychological level with a break of this level leading to a run toward the 1.2440 and 1.2312 handles respectively.

GBP/USD Daily Chart, November 27, 2024

Source:TradingView.com

Support

• 1.2500
• 1.2440
• 1.2312

Resistance

• 1.2618
• 1.2681
• 1.2750

• USDCHF takes a breather after hitting a four-month high
• Buying the dip has an advantage above 0.8750
• US core PCE inflation eyed for more volatility later today

USDCHF lost momentum after its uptrend peaked at a four-month high of 0.8956 last Friday, and there could be more cloudy periods ahead according to the technical picture.

With the RSI changing trajectory to the downside after topping near its 70 overbought level and the MACD sliding below its red signal line, the risk is more on the downside than on the upside.

That said, the price continues to trade within an upward-sloping channel and the 20- and 200-day simple moving averages (SMAs), which could balance selling interest within the 0.8800-0.8820 region, are heading for a positive intersection. Hence, any potential declines could still be attractive, unless there is a negative correction beneath 0.8750.

In the event selling forces strengthen below 0.8750, the 38.2% Fibonacci retracement of the May-September upleg could take action around 0.8700 ahead of the 50-day SMA. Slightly lower, the 0.8615-0.8640 zone could force some stability, preventing a continuation toward the 23.6% Fibonacci of 0.8573. If the latter fails to hold, the downfall could reach the 0.8500 mark.

Should the bulls bounce back above 0.8900, they will aim for a test at the channel’s upper band near 0.8990. Success there could lead the pair toward the 78.6% Fibonacci level of 0.9040. Then, all the attention could turn to the 0.9100-0.9150 caution territory.

In summary, USDCHF could face some hurdles in the short-term, though it could stay attractive to buyers if it manages to rotate near 0.8750. Watch out for the US core PCE inflation data due today at 13:30 GMT.

• US 100 index trades sideways, a tad below its all-time high
• It continues to battle with the August 5, 2024 trendline
• Momentum indicators are modestly bullish at this stage

The US 100 cash index is trading sideways today, moving in parallel with the August 5, 2024 ascending trendline. Market sentiment is modestly bullish but quite fragile, as risky markets are trying to adjust to the latest developments in active conflict regions and the tariffs announcements by President-elect Trump. Meanwhile, the bullish trend since the August 5 low needs a new higher high to remain valid.

The momentum indicators are somewhat bullish at this juncture. More specifically, the RSI is hovering a tad above its midpoint and thus pointing to some lingering bullish pressure. More importantly, the stochastic oscillator is edging towards its overbought area (OB), but it appears to lack the momentum that resulted in the November 11, 2024 all-time high. Interestingly, the Average Directional Movement Index (ADX) is not convinced of the current movement, as it is hovering below its midpoint and thus signalling a trendless market.

Should the bulls remain confident, they could try to keep the US 100 index above the 20,683-20,772 area, and gradually push it higher towards 21,231. If successful, the door would then be wide open to a new all-time high, with the 21,500 level being the first target. Even higher, the 200% Fibonacci extension level of the November 22, 2021 – October 13, 2022 downtrend is positioned just north of 23,000.

If the bears manage to regain the reins, they could try to push the US 100 index below the busy 20,683-20,772 region, which is populated by the 161.8% Fibonacci extension level, the July 11, 2024 high and the August 5, 2024 and October 26, 2023 ascending trendlines. A move below this busy area could tip the balance in favour of the bears, potentially allowing them to test the support set by the 50- and 100-day simple moving averages (SMAs) at 20,345 and 19,792 respectively.

To sum up, the US 100 index is on a gentle upwards move, but momentum is fragile ahead of some key US data releases and a relatively quieter week due to the Thanksgiving holiday.

The start of the final trading week of November has been eventful. Several currency pairs experienced a "gap" or price difference between Friday's close and Monday's opening. For instance, the GBP/USD pair opened 60 pips lower, EUR/USD saw a 70-pip gap, and USD/JPY opened with a 50-pip difference. At the week's outset, the USD faced a downward pullback, which in some pairs has since transitioned to a sideways trend. Analysts attribute this sharp retreat to market reactions following Trump’s selection of a Treasury Secretary. Scott Bessent recently stated that tariffs should be introduced gradually, and his supporters believe he could help curb the growth of the U.S. budget deficit.

EUR/USD

As anticipated, the EUR/USD pair has renewed last year’s lows, briefly trading below 1.0400. A sharp rebound from the 1.0330 level allowed buyers to regain momentum, pushing the pair up to 1.0540. Currently, the upward correction has shifted into a sideways movement within the 1.0500–1.0400 range. The next breakout with consolidation is likely to dictate the pair's direction:

A move above 1.0540 could prompt a test of the 1.0700–1.0800 zone.
A break below the recent low at 1.0330 might pave the way for a test of 1.0200–1.0000.

The upcoming trading sessions could be pivotal for EUR/USD, with the following key events on the calendar:

• Today at 11:00 (GMT+3): European Central Bank non-monetary policy meeting
• Today at 16:30 (GMT+3): U.S. GDP data for Q3
• Today at 18:00 (GMT+3): U.S. core personal consumption expenditures price index
• Tomorrow at 16:00 (GMT+3): Germany’s November consumer price index (CPI)

GBP/USD

Technical analysis of the GBP/USD pair suggests price consolidation within the 1.2620–1.2480 range.

If buyers manage to push the pair above 1.2620 during upcoming sessions, a robust upward correction towards 1.2720–1.2840 could develop.
Conversely, breaking the support at 1.2480 could renew bearish momentum, targeting 1.2350–1.2300.

Important UK economic data is expected on Friday, including mortgage lending figures and the Bank of England's financial stability report.

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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.

• USDJPY loses ground around 200-day SMA
• RSI and MACD head south

USDJPY has declined considerably toward the 200-day simple moving average (SMA) around 152.10, with the potential to hit the short-term uptrend line before heading upwards again. 

The momentum oscillators are confirming the recent bearish movement. The RSI is pointing downwards, falling beneath the neutral threshold of 50, while the MACD is standing beneath its trigger line, losing some steam.

Further declines could see traders meeting the 151.30 support level, ahead of the 50-day SMA at 150.60. A tumble beneath these lines could endorse the bearish outlook, challenging the 149.15 barrier.

On the other hand, a pullback from either the 200-day SMA or the near-term rising trend line could lead the bulls towards the 153.25 resistance level. More increases could drive the market until the three-and-a-half-month high of 156.75.

To sum up, USDJPY is posting notable losses, but the outlook remains positive in the short-term view.

Markets

US President-elect Trump announcing he will raise tariffs on imports from Canada and Mexico by 25% and the levy on China by 10% in the end only had a limited impact on markets. Early rises in yields and the dollar were largely reversed. The US yield curve closed with the 2-y 1.2 bps lower (benchmark change) and the 10-y adding 3.3 bps. However, the biggest intraday swigs came in US trading hours, not immediately after the Trump announcements. US yields initially (re)gained a few basis points on mixed regional confidence and housing data. US consumer confidence rebounded to the best level since July last year. A $70 bln 5-y auction went ok, with a slightly above average bid-to-cover ratio (2.43) and a yield print close to the WI bid (4.197%). While individual policy makers evidently still put personal accents in their assessment of policy, the global tone from the Fed minutes of the November 7 meeting was that as inflation is continuing to move to the 2.0% target but the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral policy stance. Uncertainty on the level of this neutral rate makes it difficult to assess the degree of policy restriction and is an additional reason for a cautious approach. Markets still see about a 60% chance on a December Fed rate cut. German yields remained under modest downward pressure easing between 0.8 bps (2-y) and 2.3 bps (10-y). US equities for now didn’t see much of a risk from the Trump tariffs announcement. The S&P 500 set a new record close (+0.57%). The dollar showed no clear directional pattern. DXY finish slightly higher from Monday’s close at 107.01.EUR/USD after an intraday rebound finish little changed (1.0489). The yen still outperformed (USD/JPY close 153.08 from 154.2).

Asian equity indices this morning are trading mixed as regional investors ponder the potential impact of Trump’s trade policy. Later today, the US calendar is well filled with amongst others a revision to the US Q3 GDP data, durable goods orders, jobless claims, the Chicago PMI and spending and income data, including the price deflators. Both the Y/Y headline (2.3%) and core (2.8%) PCE deflators are expected slightly higher from last month. The might have some intraday impact but the debate on a December rate cut won’t be concluded today as markets are counting down to the Thanksgiving weekend. US yields are in a mild correction after recent rally. In Europe, we look out how much room there is left after recent decline in yields. Even in case of a pause, the picture for EUR/USD looks fragile, with a return to the 1.0335 correction low still very well possible. Yen outperformance still continues, also this morning.

News & Views

The Reserve Bank of New Zealand lowered its policy rate for a second consecutive meeting by 50 bps, from 4.75% to 4.25%. RBNZ governor Orr suggested that a third such move would come at February 19 meeting conditional on economic projections panning out. The RBNZ puts an average policy rate of 3.83% forward in Q2 2025 (vs 4.36% in August forecasts). The landing zone remains broadly unaltered (3.17% average in Q4 2026 vs 3.13%) implying no intention to bring policy rates below neutral levels. Annual inflation forecasts for Q4 2024, 2025 and 2026 stand at 2.1%, 2.4% and 2.1%, close to August levels (2.3%-2.3%-2%). The downturn in domestic activity had stabilized in recent months, following the pronounced and broad-based deterioration observed in August. Growth is expected to recover during 2025, but considerable spare productive capacity remains in the economy. NZD swap rates rebound up to 10 bps at the front end of the curve as some expected more dovish language or even already a 75 bps rate cut today. NZD/USD leaves the YTD lows around 0.58 behind to currently change hands around 0.5870.

The pace of annual Australian inflation was unchanged in October (2.1% Y/Y), the lowest level since July 2021. The significant drop from 3.8% Y/Y in June Is mainly due to price falls in Electricity and Automotive fuel prices. Core measures show a more diffuse picture. Annual trimmed mean inflation was 3.5%, up from 3.2% and similar to where it was in August. The CPI excluding volatile items and holiday travel was 2.4% Y/Y, down from 2.7% in September. The next quarterly inflation report, used as key RBA-input will only be published on Jan 29. AUD/USD remains stuck near the recent lows sub-0.65...

Daily Pivots: (S1) 1.0428; (P) 1.0486; (R1) 1.0548; More...

EUR/USD is staying in consolidation above 1.0330 and intraday bias remains neutral. Further decline is expected as long as 1.0609 resistance holds. On the downside, sustained trading below 1.0404 key fibonacci level will carry larger bearish implication and target next level at 161.8% projection of 1.1213 to 1.0760 from 1.0936 at 1.0203. However, firm break of 1.0609 will confirm short term bottoming, and turn bias back to the upside for 1.0760 support turned resistance first.

In the bigger picture, immediate focus is now on 50% retracement of 0.9534 (2022 low) to 1.1274 at 1.0404. Strong rebound from this level will keep price actions from 1.1273 (2023 high) as a medium term consolidation pattern only. However, sustained break of 1.0404 will raise the chance that whole up trend from 0.9534 has reversed. That would pave the way to 61.8% retracement at 1.0199 first. Firm break there will target 0.9534 low again.