The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0259
• Prev. Close: 1.0308
• % chg. over the last day: +0.48 %

The Dollar Index remained near 109 on Monday, holding at its highest levels in more than two years, as investors prepare for the release of key labor market data this week that could determine the Federal Reserve’s monetary policy outlook. The December employment report will be released on Friday, following Tuesday’s JOLTS report and Wednesday’s ADP employment survey. The dollar has also received support ahead of former President Donald Trump’s inauguration on January 20, as his proposed policies — raising tariffs, curbing immigration, and boosting economic growth — are seen as potentially inflationary.

Trading recommendations

• Support levels: 1.0223
• Resistance levels: 1.0323, 1.0372, 1.0424, 1.0447, 1.0493, 1.0513

The EUR/USD currency pair’s hourly trend is bearish. Last Thursday, the euro fell to the support level of 1.0223, where the fixation of earlier open sales took place. Currently, the price will seek to test the broken level of 1.0323. However, since there is an untested liquidity accumulation below 1.0223, there is a high probability of another wave of decline. Sell trades can be considered from 1.0323 or 1.0372, but with confirmation. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks the resistance level of 1.0425 and consolidates above it, the uptrend will likely resume.

(Click on image to enlarge)

News feed for: 2025.01.06

• German Services PMI (m/m) at 10:55 (GMT+2);
• Eurozone Services PMI (m/m) at 11:00 (GMT+2);
• German Consumer Price Index (m/m) at 15:00 (GMT+2);
• US Services PMI (m/m) at 16:45 (GMT+2);
• US Factory Orders (m/m) at 17:00 (GMT+2).

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2371
• Prev. Close: 1.2425
• % chg. over the last day: +1.23 %

The net approvals of UK residential mortgages, an indicator of future borrowing, fell by 2,400 to 65,700 in November 2024, below market expectations of 68,500. The “effective” interest rate, i.e. the interest actually paid, on newly borrowed mortgages fell 11 basis points to 4.50% in November, the lowest since April 2023. Net consumer lending in the UK rose by £0.88 billion in November 2024, the lowest level in seven months. All this data points to a deteriorating economic climate.

Trading recommendations

• Support levels: 1.2371, 1.2299
• Resistance levels: 1.2446, 1.2477, 1.2505, 1.2540, 1.2568, 1.2614, 1.2667

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. Last Thursday the price reached the support level of 1.2371, where some fixation of earlier open sales took place. Currently, the price is trying to test the broken levels of 1.2446 or 1.2477, which can be considered for selling if sellers react. There are no optimal entry points for buying now.

Alternative scenario:

if the price breaks through the resistance level at 1.2540 and consolidates above it, the uptrend will likely resume.

(Click on image to enlarge)

News feed for: 2025.01.06

• UK Services PMI (m/m) at 11:30 (GMT+2).

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 157.45
• Prev. Close: 157.30
• % chg. over the last day: -0.09 %

The Japanese yen slid to 157.5 per dollar on Monday, hitting its lowest level since July, as uncertainty over the timing of the Bank of Japan’s interest rate hike persists. BoJ Governor Kazuo Ueda reiterated that the timing of any monetary policy adjustments will depend on the development of the economy, prices, and financial situation, emphasizing the need for sustained wage growth. On the data side, Japan’s services PMI reading for December was revised downward, reinforcing the dovish bias towards BoJ policy. 

Trading recommendations

• Support levels: 156.44, 155.94, 154.34
• Resistance levels: 157.84, 159.07, 159.47

From a technical point of view, the medium-term trend of the USD/JPY currency pair is bullish. The Japanese yen is once again losing resistance against the US dollar, which increases the probability of intervention from the Japanese authorities. Currently, the price seeks to test the liquidity above 157.84 or 159.07, where we can look for sales if sellers react. There are no optimal entry points for buying now, as the price is in front of two resistance zones.

Alternative scenario:

if the price breaks and consolidates below the 155.94 support, the downtrend will likely resume.

(Click on image to enlarge)

News feed for: 2025.01.06

• Japan Services PMI (m/m) at 02:30 (GMT+2).

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2660
• Prev. Close: 2638
• % chg. over the last day: -0.83 %

Gold reversed its previous gains on Friday and slipped to $2,640 per ounce, trimming weekly gains. New ISM data showed that manufacturing orders and production rose in December, potentially heralding a recovery in the sector after a long period of poor productivity. The survey also revealed manufacturers’ concerns about tariffs imposed by a future presidential administration, adding to pro-inflation risks that could prevent the Fed from extending its rate-cutting cycle. In turn, bullion prices continue to be supported by looser monetary policy elsewhere and a wave of Central Bank purchases.

Trading recommendations

• Support levels: 2631, 2622, 2603, 2570
• Resistance levels: 2664, 2672, 2692

From the point of view of technical analysis, the trend on the XAU/USD is bearish. On Friday, the price reached the resistance level of 2664, where sellers took the initiative, which led to the price decline to 2631. However, since the main liquidity is now above 2672, there is a high probability that the price will resume its upward move. Under such market conditions, buy trades should be considered from 2631 or 2622, but with confirmation. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks above the 2664 resistance level, the uptrend will likely resume.

(Click on image to enlarge)

News feed for: 2025.01.06

• US Services PMI (m/m) at 16:45 (GMT+2);
• US Factory Orders (m/m) at 17:00 (GMT+2).

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