As forex markets enter the final trading week of 2024, liquidity conditions are expected to deteriorate significantly due to the holiday season. Major currency pairs including EUR/USD, GBP/USD, and USD/JPY are likely to experience reduced trading volumes, which can lead to unexpected price spikes and false breakouts. Market participants are advised against searching for trading opportunities that aren't clearly present, as thin liquidity can amplify normally minor price movements. Historical data shows that forcing trades during this period often results in poor risk-reward outcomes. Key support and resistance levels may not hold as reliably as during normal market conditions. Professional traders typically reduce position sizes or remain on the sidelines during this period, waiting for normal market conditions to return in early January. The lack of major economic releases and institutional participation creates an environment where technical levels become less reliable for trading decisions.
EURUSD
GBPUSD
USDJPY
Sentiment:
Neutral
Source: Finnhub
GBP/USD advanced 0.4% to 1.2580 as sterling found support from signs of economic resilience despite ongoing UK economic challenges. The pound's rally came amid market reassessment of UK growth prospects, with recent data suggesting the economy is weathering current headwinds better than anticipated. While overall economic activity remains sluggish, pockets of strength in services and consumer spending have provided sterling with a foundation for gains. The US Dollar Index retreated 0.3% to 107.85, further supporting cable's upward momentum. Technical indicators show GBP/USD breaking above the 1.2550 resistance level, opening the path toward 1.2620. The 50-day moving average at 1.2520 now acts as immediate support. Traders remain cautious ahead of next week's UK inflation data, which could influence Bank of England rate expectations and determine whether sterling's recovery has legs.
GBPUSD
Sentiment:
Positive
Source: Marketaux
USD/JPY has declined to 156.50, down 0.6% as market analysis reveals the Yen's recent movements are driven more by Bank of Japan policy signaling than interest rate spreads. Despite the wide rate differential between the Fed and BoJ remaining near 5%, the Yen has shown resilience as traders interpret subtle shifts in BoJ communication. The central bank's gradual move away from ultra-loose policy, combined with speculation about potential policy normalization in 2025, is supporting the currency. Technical analysis shows USD/JPY breaking below the 157.00 psychological level, with next support at 156.00. The Dollar Index (DXY) has weakened to 107.80, adding pressure on USD/JPY. Market positioning data indicates growing short positions in USD/JPY, suggesting traders expect further Yen appreciation. The pair's movements highlight how policy expectations can override traditional carry trade dynamics, particularly as global economic uncertainty increases demand for safe-haven assets.
USDJPY
Sentiment:
Negative
Source: Marketaux
Gold (XAU/USD) has advanced 0.8% to $2,640 per ounce, while silver (XAG/USD) gained 1.2% to $30.25, even as positioning data shows long sentiment cooling among retail traders. The precious metals rally comes amid broader USD weakness, with the Dollar Index declining 0.3% to 107.85. Despite the price appreciation, commitment of traders reports indicate a reduction in net long positions, suggesting profit-taking among speculative investors. Gold's advance above the $2,630 resistance level opens the path toward $2,650, while silver faces resistance at $30.50. The divergence between price action and sentiment indicators reflects year-end position adjustments rather than a fundamental shift in bullish outlook. Technical indicators remain constructive for both metals, with gold maintaining support above its 20-day moving average at $2,615. Traders are monitoring USD movements and real yield dynamics as key drivers for precious metals heading into 2025.
XAUUSD
XAGUSD
Sentiment:
Positive
Source: Marketaux
USD/JPY declined 0.4% to 156.85 during Asian trading as Japanese officials intensified intervention warnings, prompting traders to reduce long dollar positions. Finance Ministry officials reiterated their readiness to take "appropriate action" against excessive yen weakness, marking the strongest verbal intervention in weeks. The People's Bank of China set the USD/CNY reference rate at 7.0572, slightly stronger than market expectations. Silver surged to a new record high above $32.50, driven by industrial demand and inflation hedging. Oil prices gained support from tighter US sanctions enforcement and escalating Middle East tensions, with WTI crude up 0.8% to $71.20. Technical analysis shows USD/JPY facing immediate support at 156.50, with a break below potentially accelerating declines toward 155.80. The intervention rhetoric suggests authorities may act if the pair approaches the 158.00 psychological level again.
USDJPY
USDCNY
Sentiment:
Negative
Source: Finnhub
Asian currency markets experienced heightened volatility as political developments and robust equity performance created mixed trading conditions. The Japanese yen strengthened 0.5% against the dollar to 156.70 following intervention warnings from Tokyo officials. Meanwhile, emerging Asian currencies faced pressure from political probes and regulatory uncertainties, with the Thai baht weakening 0.3% and Malaysian ringgit down 0.2% against the greenback. Despite currency headwinds, regional equity markets posted strong gains, with the Nikkei 225 up 1.2% and Hang Seng advancing 0.9%, supported by technology sector optimism. The divergence between currency weakness and equity strength reflects capital flow complexities as year-end positioning intensifies. Traders are monitoring key support levels for USD/JPY at 156.50 and resistance for emerging market pairs. The mixed signals suggest continued volatility ahead, with political developments likely to drive short-term currency movements across the region.
USDJPY
USDTHB
USDMYR
Sentiment:
Neutral
Source: Marketaux
Major forex pairs including EUR/USD, USD/JPY, and USD/CHF are positioned for potential volatility as analysts identify ten key market surprises that could reshape the global economic landscape in 2026. The analysis highlights scenarios ranging from unexpected central bank policy shifts to geopolitical developments that could trigger significant currency realignments. EUR/USD currently trades near critical technical levels, with potential catalysts including diverging monetary policies between the ECB and Federal Reserve. USD/JPY remains sensitive to Bank of Japan policy normalization prospects, while USD/CHF continues to reflect safe-haven demand dynamics. The report emphasizes heightened uncertainty around inflation trajectories, growth differentials, and political risks heading into 2026. Traders are advised to monitor key support and resistance levels across these pairs while maintaining flexible positioning given the elevated probability of market-moving surprises that could challenge consensus forecasts.
EURUSD
USDJPY
USDCHF
Sentiment:
Neutral
Source: Marketaux
USD/JPY has spiked 1.8% (280 pips) to 157.20 following the Bank of Japan's decision to raise interest rates to 0.5%, the highest level since 1999. Despite the 25 basis point hike from 0.25%, the yen cratered as markets questioned the BOJ's credibility and commitment to further tightening. Japanese government bond yields surged, with the 10-year yield jumping 15 basis points to 1.23%, reflecting investor concerns about policy sustainability. The move represents the BOJ's third rate increase this year, yet the yen's weakness suggests traders doubt the central bank's ability to narrow the interest rate differential with the Federal Reserve's 4.25-4.50% range. Technical indicators show USD/JPY breaking above the 156.00 resistance level with momentum targeting 158.50. The yen's collapse despite tightening monetary policy raises questions about intervention risks and could prompt further volatility in Asian forex markets.
USDJPY
Sentiment:
Very Negative
Source: Marketaux
USD/CAD declined 0.4% to 1.4350 following Canada's better-than-expected October retail sales data, which rose 0.2% versus 0.0% forecast. Despite unemployment creeping higher and housing market struggles, Canadian consumers continue spending, with advance November readings showing very strong momentum. Core retail sales faced headwinds from food and beverage retailers, particularly beer, wine, and liquor stores which plummeted 10.6%, partially attributed to a British Columbia strike. The resilient consumer spending data reduces pressure on the Bank of Canada for aggressive rate cuts, supporting the loonie. Technical indicators show USD/CAD testing support at 1.4340, with resistance at 1.4400. The stronger retail sales figures suggest Canadian economic resilience despite housing sector challenges, potentially limiting further CAD weakness and keeping the BoC cautious about monetary easing pace.
USDCAD
Sentiment:
Negative
Source: Finnhub
Major currency pairs are experiencing mixed movements as markets digest cooling U.S. CPI data, the Bank of Japan's widely anticipated rate hike, and rising prospects of a Russia-Ukraine peace deal. The dollar index has weakened 0.2% to 106.85 following softer inflation readings, while USD/JPY dropped 0.8% to 154.20 after the BoJ's hawkish stance. EUR/USD gained modestly to 1.0420, supported by reduced Fed rate cut expectations for 2025. Geopolitical developments regarding potential Russia-Ukraine negotiations are adding to market uncertainty, with safe-haven flows showing mixed patterns. Risk sentiment remains cautious as traders balance central bank policy divergence against geopolitical risks. Technical analysis shows USD/JPY approaching key support at 154.00, while EUR/USD faces resistance at 1.0450. The complex interplay of monetary policy shifts and geopolitical factors suggests continued volatility across major pairs.
USDJPY
EURUSD
Sentiment:
Neutral
Source: Marketaux
The euro showed modest weakness against major currencies after the European Central Bank reported banks deposited a substantial €2,453.28 billion in its overnight facility, signaling persistent excess liquidity in the eurozone banking system. EUR/USD edged down 0.1% to 1.0415, while EUR/GBP fell to 0.8320. The massive overnight deposits indicate banks prefer parking funds at the ECB rather than lending, potentially reflecting economic uncertainty and tight credit conditions. German M&A activity data and ongoing geopolitical tensions are adding to euro headwinds. No overnight loans were requested from the ECB, further highlighting the liquidity imbalance. Technical indicators suggest EUR/USD is testing support at 1.0410, with resistance at 1.0440. The excess liquidity situation may limit ECB's monetary policy effectiveness and could pressure the euro further if economic conditions deteriorate or geopolitical risks escalate.
EURUSD
EURGBP
Sentiment:
Negative
Source: Marketaux
GBP/USD has declined 0.5% to 1.2520 as market participants price in higher probability of Bank of England rate cuts in early 2025. Sterling weakness accelerated after softer UK economic indicators and dovish comments from BoE officials reignited easing expectations. The pound's retreat comes despite recent USD weakness, highlighting GBP-specific concerns about growth momentum and persistent inflation challenges. Technical analysis shows GBP/USD breaking below the key 1.2550 support level, with next support at 1.2500 psychological level. The 50-day moving average at 1.2580 now acts as resistance. Market positioning data reveals increasing short positions on sterling as traders anticipate the BoE may need to prioritize growth support over inflation fighting. Near-term direction depends heavily on upcoming UK GDP and inflation data, with further disappointments likely to accelerate pound selling pressure toward 1.2450.
GBPUSD
Sentiment:
Negative
Source: Marketaux
EUR/USD is trading in a tight range around 1.0420, showing limited reaction to the European Central Bank's latest policy stance. The pair gained a modest 0.1% during the session but remains capped below the 1.0450 resistance level. The ECB maintained its current policy framework while acknowledging persistent economic challenges in the eurozone. Market participants are digesting mixed signals from ECB officials regarding the pace of future rate adjustments, creating uncertainty about monetary policy trajectory. Technical indicators suggest neutral momentum, with the pair trapped between 1.0400 support and 1.0450 resistance. The 200-day moving average at 1.0435 is acting as a pivot point. Traders await Friday's eurozone PMI data for clearer direction, with manufacturing sector performance crucial for EUR sentiment. A break above 1.0450 could target 1.0480, while failure at support may accelerate declines toward 1.0370.
EURUSD
Sentiment:
Negative
Source: Marketaux
EUR/USD and GBP/USD are experiencing downward pressure as BRICS nations quietly reduce their US Treasury holdings, potentially strengthening the dollar through reduced supply dynamics. EUR/USD has declined 0.4% to 1.0420, while GBP/USD dropped 0.5% to 1.2580, as markets digest the implications of decreased foreign demand for US debt. The coordinated reduction by Brazil, Russia, India, China, and South Africa represents a strategic shift away from dollar-denominated assets, though paradoxically supporting USD strength in the near term through scarcity effects. USD/JPY remains elevated at 156.80, while EUR/GBP shows relative stability at 0.8280. Technical analysis reveals EUR/USD testing support at 1.0400, with further downside targeting 1.0350 if breached. The development could force the Federal Reserve to reassess monetary policy if domestic buyers must absorb increased Treasury supply, potentially affecting global forex dynamics through 2025.
EURUSD
GBPUSD
USDJPY
EURGBP
Sentiment:
Negative
Source: Marketaux
Currency markets are experiencing heightened volatility as traders react to evolving Chinese trade policies and mixed economic signals from major economies. The US dollar index has shown mixed performance, oscillating between gains and losses as markets digest conflicting data points. Asian currencies, particularly the Chinese yuan, face pressure from Beijing's potential trade policy adjustments, which could impact regional currency flows. European currencies remain relatively stable but cautious ahead of year-end positioning. Market participants are closely monitoring central bank communications for guidance on 2024 monetary policy trajectories. Technical indicators suggest increased volatility across major pairs, with traders advised to maintain wider stop-losses. The combination of trade uncertainty and diverging economic data suggests continued choppy trading conditions through the remainder of December.
USDCNY
DXY
Sentiment:
Neutral
Source: Marketaux
GBP/USD declined 0.2% to 1.2680 following weaker-than-expected UK retail sales data released during the European session. November retail sales contracted by 0.3% month-on-month, missing forecasts of 0.0% growth and marking the third consecutive monthly decline. The disappointing figures add to concerns about UK economic resilience amid persistent inflation and high interest rates. Sterling found immediate support at 1.2670, with resistance now seen at 1.2720. The data reinforces market expectations that the Bank of England may pause its tightening cycle, having already raised rates to 5.25%. Traders are now focusing on upcoming UK GDP data and any shifts in BoE rhetoric. The technical outlook remains neutral to bearish below 1.2750, with potential for further downside if support at 1.2650 breaks.
GBPUSD
Sentiment:
Negative
Source: Finnhub
EUR/USD continues its bullish trajectory, holding firmly above the psychological 1.1700 level with gains of 0.15% in early trading. The pair's strength reflects ongoing dollar weakness amid expectations of a more dovish Federal Reserve stance in 2024. European economic data has shown resilience, with recent PMI figures beating expectations and supporting euro strength. Technical indicators remain bullish, with the RSI at 65 suggesting room for further upside without being overbought. Immediate resistance lies at 1.1750, followed by 1.1800. Support is well-established at 1.1700 and 1.1650. The bullish trend remains intact as long as the pair holds above the 1.1650 level. Traders are positioning for potential moves toward 1.1800 ahead of next week's ECB meeting, where officials may signal continued hawkish policy.
EURUSD
Sentiment:
Very Positive
Source: Marketaux
USD/JPY trades steadily around 157.50, showing minimal reaction to the Bank of Japan's latest policy meeting where rates remained unchanged at -0.1%. The BoJ maintained its ultra-loose monetary policy stance despite growing inflation pressures, citing the need to support economic recovery. Market participants had largely priced in the no-change decision, resulting in muted volatility. The pair found support at 157.00 with resistance at 158.20. Japanese officials continue verbal interventions warning against excessive yen weakness, keeping traders cautious about sharp moves. Technical indicators suggest consolidation between 156.50-158.50 near term. The wide interest rate differential between the Fed and BoJ continues to support the pair, though intervention risks cap upside potential. Traders await Friday's Japanese CPI data for further direction.
USDJPY
Sentiment:
Neutral
Source: Marketaux
USD/JPY experienced significant volatility following the Bank of Japan's 25 basis point rate hike to 0.75%, marking the highest level in three decades. The pair initially spiked 0.8% to 157.20 before retracing to 156.45 as markets digested the implications of Japan's continued policy normalization. Governor Ueda's cautious tone during the press conference tempered hawkish expectations, suggesting a measured approach to future tightening. The decision reflects the BoJ's confidence in sustainable inflation and wage growth, diverging from other major central banks considering rate cuts. Technical indicators show immediate resistance at 157.50 (session high), with support established at 155.80 (50-day moving average). Traders are closely monitoring Ueda's upcoming comments for guidance on the pace of future hikes, which could determine whether USD/JPY breaks below the critical 155.00 support level.
USDJPY
Sentiment:
Negative
Source: Finnhub
USD/CAD dropped 0.4% to 1.4350 as softer-than-expected US CPI data weighed heavily on the greenback. November's inflation reading of 2.7% year-on-year marked the lowest pace since 2021, reinforcing expectations for Federal Reserve rate cuts in early 2024. The Canadian dollar gained despite mixed domestic data, with oil prices holding steady near $71/barrel providing additional support. Technical analysis shows the pair breaking below the 50-day moving average at 1.4380, opening the path toward 1.4300 support. Resistance now sits at 1.4400-1.4420. The bearish momentum could accelerate if upcoming US retail sales disappoint. Bank of Canada officials remain hawkish, creating policy divergence that favors CAD strength. Traders should monitor oil price movements and Friday's Canadian retail sales for near-term direction.
USDCAD
Sentiment:
Negative
Source: Marketaux
