The Analytical Overview of the Main Currency Pairs on 2025.12.22

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1722
• Prev. Close: 1.1710
• % chg. over the last day: -0.10%

On Friday, the EUR/USD rate dropped to a weekly low, pressured by weak macroeconomic data from the Eurozone, which the market perceived as “dovish” regarding ECB policy. Specifically, Germany’s Producer Price Index (PPI) fell to 2.3% year-on-year in November, missing expectations and marking the sharpest decline in 20 months. Additionally, the GfK Consumer Confidence Index for January unexpectedly plunged to its lowest level in nearly two years. The single currency faced further pressure due to concerns over Eurozone fiscal policy after Germany announced plans to increase federal bond issuance next year by nearly 20% to a record €512 billion to fund rising government spending. Markets are pricing out a 25 bps ECB rate cut at the next meeting on February 5.

Trading recommendations

• Support levels: 1.1707, 1.1680, 1.1656, 1.1590, 1.1555, 1.1503
• Resistance levels: 1.1764, 1.1786

A sideways (flat) corridor is beginning to form on this pair. On one hand, the EMA lines act as dynamic resistance levels. On the other hand, the price is supported by the 1.1707 level. It is important for traders to wait for a price breakout beyond this range. Price consolidation above the EMA lines will open the path for long positions up to the resistance level of 1.1764. A breakdown and consolidation below 1.1707 will trigger a sell-off toward 1.1680.

Alternative scenario:

• Trend: Neutral
• Sup: 1.1707
• Res: 1.1764
• Note: Looking for buying opportunities above the EMA lines toward 1.1764. A price hold below 1.1707 will trigger a sell-off to 1.1680.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3377
• Prev. Close: 1.3376
• % chg. over the last day: -0.01 %

Sterling is showing a limited recovery after the Bank of England’s rate cut turned out to be slightly less “dovish” than the market anticipated. Asset managers entered the meeting with substantial short positions on the pound, expecting more pronounced stimulus measures. However, the final decisions fell short of these expectations, forcing traders to revise their expectations for the scale of the easing cycle in 2026. Bank analysts maintain a moderately positive outlook for 2026, expecting a rise toward 1.36 amid a strengthening trend of dollar weakness and relative euro strength.

Trading recommendations

• Support levels: 1.3362, 1.3347, 1.3354, 1.3292, 1.3268, 1.3156, 1.3111
• Resistance levels: 1.3400, 1.3447

The British pound is also trapped in a high-volatility corridor between 1.3362 and 1.3400. Currently, the price is trading at the upper boundary, where it is crucial to evaluate the price action: a breakout and consolidation above 1.3400 will open the path to 1.3447. Conversely, if sellers show initiative at the 1.3400 level, intraday short positions toward 1.3362 can be considered.

Alternative scenario:

• Trend: Neutral
• Sup: 1.3362
• Res: 1.3400
• Note: Consolidation above 1.3400 will open the path to 1.3447. If sellers take initiative at 1.3400, we consider sells toward 1.3362.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 155.49
• Prev. Close: 157.72
• % chg. over the last day: +1.43 %

The Japanese yen weakened to 157 per dollar, approaching a four-week low, after Bank of Japan Governor Kazuo Ueda failed to provide clear signals regarding further policy tightening. He emphasized the regulator’s flexibility and the uncertainty surrounding the neutral interest rate. Pressure on the yen intensified following comments about close coordination with the government, given Prime Minister Sanae Takaichi’s inclination toward a more accommodative monetary policy. Earlier, the BoJ raised the rate as expected by 25 bps to 0.75%, the highest since 1995, in response to persistently high inflation: the headline CPI fell to 2.9% in November but has remained above the 2% target for 44 consecutive months, while core inflation held at 3%.

Trading recommendations

• Support levels: 156.93, 156.10, 155.40, 154.92, 154.41, 154.17
• Resistance levels: 157.78, 159.47

The Japanese yen depreciated sharply following the BoJ meeting. The price reached the resistance level of 157.78, and some profit-taking on previously opened long positions is currently observed. The intraday bias remains with the buyers, but there is a high probability that the price will enter a flat range between 156.93 and 157.78. In such a scenario, buy trades are best considered from the 156.93 level, but only with confirmation. There are currently no optimal entry points for sells, as there is a lack of initiative from the selling side.

Alternative scenario:

• Trend: Up
• Sup: 156.93
• Res: 157.78
• Note: Considering intraday buy trades near 156.93. There are currently no optimal entry points for selling.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 4334
• Prev. Close: 4338
• % chg. over the last day: +0.09%

On Monday, the gold price surpassed the $4,400 per ounce mark for the first time, reaching an all-time high. The rally was supported by weaker-than-expected US macroeconomic data, which fueled expectations for a more accommodative Fed policy and potential additional interest rate cuts – a key support factor for precious metals. On Thursday, the US core CPI for November showed inflation slowing to its lowest level in 4.5 years, and on Friday, the University of Michigan’s Consumer Sentiment Index for December was unexpectedly revised downward.

Additional support for the metals market comes from safe-haven demand amid uncertainty over US trade tariffs and ongoing geopolitical risks in Ukraine, the Middle East, and Venezuela. Investors are also pricing in a more dovish Fed monetary policy course for 2026, given President Trump’s intention to appoint a proponent of stimulative policy as the head of the Federal Reserve.

Trading recommendations

• Support levels: 4400, 4375, 4350, 4209
• Resistance levels: 4450, 4500

Gold has once again set an all-time high. It is currently best to focus on option (round number) levels to understand where the price is heading. The nearest such resistance level is 4450, and the support level is 4400. Since the price has deviated significantly from the moving averages, it is recommended to wait for a correction to look for buy entries. There are currently no optimal entry points for selling.

Alternative scenario:

• Trend: Up
• Sup: 4400
• Res: 4450
• Note: Considering buys from 4400 or 4375, but with confirmation. The target is to test the 4450 option level.