In a mixed market backdrop, the euro and pound struggle against a firm dollar amid U.S. economic optimism, with the euro weighed by ECB policy uncertainties and Brexit-era challenges affecting the pound. The yen sees temporary recovery but remains under pressure due to BoJ indecision. The Aussie dollar dips as RBA minutes hint at cautious rate cuts, while the Canadian dollar faces economic and political hurdles, tempered by dovish BoC policies. Gold, sensitive to U.S. Treasury yields, consolidates as risk sentiment limits its upward potential, highlighting investor caution in a volatile trading environment.
EUR/USD
The EUR/USD pair remains under bearish pressure despite recent corrections. Friday’s session saw the euro consolidate above key moving averages but failed to test higher resistance levels.
Support Levels: 1.0422, 1.0387, 1.0361
Resistance Levels: 1.0460, 1.0483, 1.0513, 1.0565, 1.0615
Analysis: The ECB’s continued emphasis on reducing borrowing costs into 2025 underpins medium-term euro weakness. However, potential economic uncertainty, particularly trade war threats from the upcoming U.S. administration, could amplify volatility.
Forecast:
- Bearish Scenario: A break below 1.0387 could trigger a decline toward 1.0361 and potentially lower.
- Bullish Scenario: A consolidation above 1.0460 could signal a reversal toward 1.0513, with the trend shifting bullish if 1.0537 is breached.
Trading Recommendations:
- Buy near 1.0422 with confirmation from technical indicators for targets at 1.0460 and 1.0483.
- Sell below 1.0387 targeting 1.0361.
GBP/USD
Despite economic challenges, the GBP/USD pair showed resilience, rebounding from a multi-week low due to temporary Dollar Index weakness.
Support Levels: 1.2537, 1.2487, 1.2446
Resistance Levels: 1.2667, 1.2719, 1.2786
Analysis: Disappointing UK GDP data adds pressure to the pound, while positive U.S. Consumer Confidence Index data could further strengthen the dollar, limiting upside potential for GBP/USD.
Forecast:
- Bearish Scenario: Failure to hold above 1.2537 could lead to a decline toward 1.2487.
- Bullish Scenario: A break and close above 1.2667 could open the path toward 1.2719.
Trading Recommendations:
- Buy above 1.2537 with targets at 1.2600 and 1.2667.
- Sell below 1.2487 targeting 1.2446.
USD/JPY
The USD/JPY pair continues to trade within a bullish medium-term trend, supported by strong U.S. statistics and a dovish Bank of Japan.
Support Levels: 156.39, 154.93, 153.14
Resistance Levels: 157.36, 157.90
Analysis: Friday’s correction to 156.39 offers potential buying opportunities, with strong U.S. data expected to further support the dollar. A hawkish Fed stance contrasts with Japan’s accommodative policy, maintaining upward pressure on the pair.
Forecast:
- Bearish Scenario: A sustained move below 156.39 could lead to further downside toward 154.93.
- Bullish Scenario: A break above 157.36 could retest 157.90 and potentially higher levels.
Trading Recommendations:
- Buy above 156.39 targeting 157.36.
- Sell below 156.26 targeting 154.93.
AUD/USD
The AUD/USD pair remains under bearish control, with price action hovering near multi-week lows. The upcoming RBA minutes and dovish language further weigh on the Australian dollar.
Support Levels: 0.6170, 0.6120
Resistance Levels: 0.6278, 0.6306
Analysis: Persistent bearish sentiment has driven the pair lower, though a short-term corrective rebound is possible. Traders should remain cautious, awaiting stronger technical confirmation.
Forecast:
- Bearish Scenario: A break below 0.6170 could push the pair toward 0.6120.
- Bullish Scenario: Consolidation above 0.6278 could indicate recovery potential toward 0.6350.
Trading Recommendations:
- Sell below 0.6170 targeting 0.6120.
- Buy only on confirmed breaks above 0.6278, aiming for 0.6350.
USD/CAD
USD/CAD continues its bullish trajectory, supported by weak Canadian GDP data and dovish Bank of Canada policies.
Support Levels: 1.4340, 1.4290
Resistance Levels: 1.4520, 1.4570
Analysis: The pair’s upward momentum remains intact despite political instability in Canada. The dovish tone from the Bank of Canada further limits CAD strength.
Forecast:
- Bearish Scenario: A move below 1.4340 could signal a temporary pullback toward 1.4290.
- Bullish Scenario: A sustained break above 1.4520 may trigger further gains toward 1.4570.
Trading Recommendations:
- Buy above 1.4340 targeting 1.4520.
- Sell below 1.4290 cautiously, aiming for 1.4250.
Gold (XAU/USD)
Gold continues to face headwinds from elevated U.S. Treasury yields and risk-on sentiment. Hawkish Fed rhetoric adds additional pressure.
Support Levels: $2,616, $2,600
Resistance Levels: $2,630, $2,643
Analysis: Negative momentum indicators suggest caution for buyers, with any upward movements likely seen as selling opportunities. The $2,600 psychological level remains critical for bulls to defend.
Forecast:
- Bearish Scenario: A break below $2,600 could lead to a retest of monthly lows around $2,580.
- Bullish Scenario: Sustained movement above $2,643 could indicate recovery potential toward $2,670.
Trading Recommendations:
- Sell below $2,616 targeting $2,600.
- Buy only on confirmed breaks above $2,643 with a target of $2,670.
Summary
Gold (XAU/USD): Sell rallies cautiously; watch for breaks below critical support.
EUR/USD: Bearish trend persists; buy cautiously near support levels.
GBP/USD: Temporary rebounds possible; sell on breaks below key levels.
USD/JPY: Maintain bullish bias; buy dips cautiously.
AUD/USD: Downtrend likely to persist; wait for stronger confirmations.
USD/CAD: Bullish momentum remains; favor buying on pullbacks.
