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
USD/JPY traded modestly higher at 157.20, gaining 0.2% despite Japan's November CPI accelerating to 2.9% year-over-year from 2.3% previously, exceeding the Bank of Japan's 2% target. The stronger inflation data has intensified speculation about a potential BoJ rate hike at next week's policy meeting, with markets pricing in a 60% probability of a 25-basis-point increase. The yen's gains were limited by persistent US dollar strength and Japan's cautious monetary policy approach. Technical indicators suggest immediate resistance at 157.50, while support lies at 156.80. The pair faces downward pressure as rate differential narrowing between the Fed and BoJ could favor yen strength. Traders are closely monitoring BoJ Governor Ueda's comments for policy signals ahead of the December 19 meeting, with a hawkish shift potentially triggering a more substantial yen rally.
USDJPY
Sentiment:
Negative
Source: Marketaux
USD/JPY remains under scrutiny as Japan's Finance Minister Katayama emphasized the government's commitment to fiscal sustainability and debt reduction. With Japan maintaining the highest debt-to-GDP ratio among advanced economies, the minister highlighted plans to boost market confidence by lowering this metric. This fiscal focus intertwines closely with monetary policy decisions and could influence Bank of Japan's future rate normalization path. The emphasis on fiscal credibility comes as policymakers balance support measures for households against growth concerns. Markets are monitoring whether Japan's debt reduction efforts might accelerate BOJ's shift away from ultra-loose monetary policy, potentially strengthening the yen. Technical traders should watch key USD/JPY levels around 150.00-152.00 range, as fiscal consolidation signals could trigger yen appreciation if markets perceive reduced need for monetary accommodation.
USDJPY
Sentiment:
Negative
Source: Finnhub
USD index shows vulnerability as new data highlights the US government's aggressive deficit spending compared to other major economies. According to BCA analysis, the Trump-Biden era has been characterized by unprecedented fiscal expansion, with US spending significantly outpacing G7 counterparts. This fiscal profligacy has supported equity markets but raises long-term concerns about dollar sustainability. The mounting deficits, which require eventual repayment with interest, could weaken USD against major pairs as investors reassess sovereign risk premiums. Market participants are increasingly factoring in the fiscal trajectory when pricing USD pairs, particularly EURUSD and USDJPY. The spending gap between the US and other developed nations may pressure Treasury yields higher, creating a complex dynamic for USD strength. Near-term, this fiscal overhang could limit USD upside despite any positive economic data, with traders watching debt ceiling debates and fiscal policy announcements for directional cues.
EURUSD
USDJPY
GBPUSD
USDCHF
AUDUSD
USDCAD
NZDUSD
Sentiment:
Negative
Source: Finnhub
The US dollar index fell 0.8% to 106.50 as softer-than-expected CPI data sparked a broad risk-on rally across markets. November CPI came in at 2.7% YoY, below the 2.9% forecast, while core CPI matched expectations at 3.3%. The data reinforced expectations for a Fed rate cut at today's FOMC meeting, with markets now pricing in a 97% probability of a 25bp reduction. Major forex pairs responded sharply, with EUR/USD climbing 0.6% to 1.0520 and GBP/USD advancing 0.7% to 1.2780. The softer inflation print has shifted near-term dollar sentiment negative, with technical indicators showing the DXY breaking below its 50-day moving average at 106.80. Traders should monitor the Fed's dot plot projections for 2025, which could either amplify or reverse current USD weakness depending on the hawkishness of future rate guidance.
EURUSD
GBPUSD
DXY
Sentiment:
Negative
Source: Finnhub
EUR/USD has climbed above its 100-hour moving average following the ECB's latest policy meeting, testing key resistance levels as traders digest hawkish inflation projections. The central bank maintained current rates but revised 2026 inflation forecasts higher, with both headline and core inflation now expected to decline more gradually toward the 2% target. The upward revision stems primarily from persistent services inflation, while growth projections also improved modestly. Staff forecasts indicate inflation will remain elevated longer than previously anticipated, supporting a cautious approach to future rate cuts. The pair faces immediate resistance at the recent swing high, with momentum indicators suggesting further upside potential if this level breaks. Traders are positioning for a potentially slower pace of ECB easing in 2025, which could provide additional support for the euro against the dollar in coming sessions.
EURUSD
Sentiment:
Positive
Source: Finnhub
USD/JPY continued its downward trajectory, falling 0.4% to 151.80 as bearish sentiment intensifies ahead of the Bank of Japan's policy decision. The pair has now declined over 3% from last week's highs near 157.00, with selling pressure accelerating after breaking below the key 153.00 support level. Market positioning data shows speculative shorts on the yen have been unwinding rapidly, contributing to JPY strength across the board. Technical indicators remain firmly bearish, with the RSI at 35 signaling oversold conditions that could prompt a brief consolidation. Immediate support lies at 151.50 (November low), while resistance has formed at 152.50 (former support turned resistance). The BoJ's stance on potential rate adjustments and any hints about ending negative rates could trigger significant volatility, with a hawkish surprise potentially accelerating USD/JPY's decline toward the 150.00 psychological level.
USDJPY
Sentiment:
Very Negative
Source: Marketaux
Foreign exchange markets are experiencing heightened volatility as traders position for a crucial week of central bank meetings. EUR/USD implied volatility has surged to 8.2%, the highest level in three months, as markets await both the Federal Reserve and European Central Bank policy decisions. The dollar index (DXY) has retreated 0.5% to 106.75, pressured by expectations of a dovish Fed pivot following softer US CPI data. EUR/USD is consolidating near 1.0500, caught between diverging monetary policy expectations. While the Fed is expected to cut rates by 25bp, the ECB is likely to maintain its hawkish stance amid persistent eurozone inflation concerns. Key levels to watch include 1.0550 resistance and 1.0450 support on EUR/USD, with a break in either direction likely to establish the pair's trend into year-end. Central bank forward guidance will be crucial for determining relative currency strength.
EURUSD
DXY
Sentiment:
Neutral
Source: Marketaux
S&P 500 futures have stabilized near 6775 following this week's sharp selloff, with traders eyeing the 6750 support level as a potential bounce zone. The index dropped over 2% earlier in the week amid concerns over Federal Reserve policy tightening and year-end profit-taking. Order flow analysis shows short-covering activity beginning to emerge, suggesting a possible technical rebound in the near term. The shift in equity market dynamics directly impacts forex risk sentiment, with safe-haven currencies like JPY and CHF maintaining bid tones while risk-sensitive pairs including AUD/USD and NZD/USD remain under pressure. Key resistance stands at 6825, with a break above potentially signaling improved risk appetite. Traders should monitor whether the 6750 support holds, as a breakdown could trigger further risk-off flows, strengthening USD and JPY against commodity currencies.
AUDUSD
NZDUSD
USDJPY
USDCHF
Sentiment:
Neutral
Source: Finnhub
GBP/USD trades defensively near 1.2650, down 0.4% on the day, as sterling struggles amid UK economic uncertainty and dollar strength. Despite the bearish price action, heavily stretched short positioning in GBP may limit further downside, with CFTC data showing near-record net short positions among speculative traders. The pair faces immediate resistance at 1.2700 (50-day moving average), while support emerges at 1.2630 (November low). EUR/GBP has climbed to 0.8320 as the euro outperforms, while GBP/NOK shows resilience near 14.20 levels. Market positioning suggests any positive UK data surprises could trigger a sharp short-covering rally in sterling. However, with Bank of England rate cut expectations building and UK growth concerns persisting, the medium-term outlook remains challenging. Traders should watch for potential position squeezes above 1.2700.
GBPUSD
EURGBP
GBPNOK
Sentiment:
Negative
Source: Marketaux
GBP/USD has tumbled 0.8% to 1.2620 following weaker-than-expected UK inflation data that reignited Bank of England rate cut speculation. UK CPI fell to 2.5% year-over-year in November, missing forecasts of 2.6%, while core inflation dropped to 3.5% from 3.7%. The soft inflation print has pushed market pricing for a December BoE rate cut to 65% probability, up from 40% before the data release. Sterling weakness accelerated through key technical support at 1.2650, with the pair now testing the 1.2600 psychological level. The disappointing CPI data compounds existing concerns about UK economic growth, with recent PMI surveys showing contraction in manufacturing activity. Near-term support lies at 1.2580 (October low), while resistance has formed at the broken 1.2650 level. Further BoE dovishness could extend losses toward 1.2500.
GBPUSD
Sentiment:
Very Negative
Source: Marketaux
