KEY HIGHLIGHTS
- EUR/USD Consolidates Amid Light Volumes, Focus on Fed.
- GBP/USD Subdued as Market Awaits Key Economic Data.
- USD/JPY Bullish Tone Supported by Fed’s Hawkish Stance.
- AUD/USD Declines, Focus Shifts to RBA Minutes.
INTRODUCTION
Currency markets kicked off the week cautiously, with major pairs such as EUR/USD, GBP/USD, USD/JPY, and AUD/USD consolidating amid subdued trading volumes. Investors are focusing on central bank policies, economic data, and geopolitical developments to shape near-term price movements.
EUR/USD: Consolidation Amid a Holiday-Shortened Week
The EUR/USD pair remains steady, trading near 1.0440 during Monday’s European session. This consolidation comes as markets prepare for a holiday-shortened week, with Christmas Eve and Boxing Day affecting trading schedules on Wednesday and Thursday.
Key Factors Influencing EUR/USD
- US Dollar Stabilization: After a steep decline on Friday due to weaker-than-expected US Personal Consumption Expenditure (PCE) Price Index data, the US Dollar (USD) has stabilized. Core PCE inflation, the Federal Reserve’s preferred metric, rose by 2.8% year-over-year, slightly below the 2.9% forecast. This has raised uncertainties about the Fed’s potential rate-cut cycle in 2025.
- Economic Calendar: Monday’s schedule is light, with investors turning their attention to Tuesday’s release of US Durable Goods Orders for November, expected to show a 0.4% decline after a 0.3% rise in October.
Technical Overview
- Moving Averages:
- Exponential: MA10 (1.0446), MA20 (1.0491), MA50 (1.0619) – All indicating bearish momentum.
- Simple: MA10 (1.0454), MA20 (1.0496), MA50 (1.0633) – Negative crossover confirming bearish trends.
- Indicators:
- RSI: 38.87 (Sell Zone)
- Stochastic Oscillator: 19.35 (Neutral)
- Key Levels:
- Resistance: R1 (1.0846), R2 (1.0988)
- Support: S1 (1.0384), S2 (1.0242)
Trade Suggestion
Limit Sell: 1.0460 | Take Profit: 1.0344 | Stop Loss: 1.0548
GBP/USD: Range-Bound with Limited Upside Potential
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