The Analytical Overview of the Main Currency Pairs on 2024.12.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0428
• Prev. Close: 1.0405
• % chg. over the last day: -0.22 %

The euro slipped below $1.04 against the dollar, approaching the late November low, and fell nearly 6% in 2024 due to diverging expectations for US and EU Central Bank policies. European Central Bank (ECB) President Christine Lagarde said the Eurozone is “very close” to its medium-term inflation target. The ECB cut rates to 3% for the fourth time in December but maintained a cautious tone. Lagarde emphasized that while core inflation has fallen to 2.2%, services inflation remains high at 3.9%, indicating that challenges remain. At the same time, the US Federal Reserve estimates only two rate cuts in 2025, compared to the previous projection of four, which supports the dollar.

Trading recommendations

• Support levels: 1.0372, 1.0332
• Resistance levels: 1.0422, 1.0460, 1.0483, 1.0537, 1.0565, 1.0615

The EUR/USD currency pair’s hourly trend is bearish. On Friday, the euro corrected on the background of the Dollar Index growth. There is a decrease in volatility on the eve of Christmas and New Year. Most likely, the euro will fluctuate between 1.0372 and 1.0422 until the end of the week. Inside the day, it is worth concentrating on selling from the moving averages or from 1.0422. For buying, 1.0372 can be considered, but only with confirmation, as there is a high probability of an update of last week’s low.

Alternative scenario:

if the price breaks the resistance level of 1.0513 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2566
• Prev. Close: 1.2536
• % chg. over the last day: -0.24 %

The Bank of England’s (BoE) dovish tone on the latest 2024 rate decision had a negative impact on sterling. The BoE kept its key interest rate at 4.75% as expected, but the unexpected split vote, with three policymakers in favor of a rate cut, heightened fears that rates could fall faster than expected next year. Although wage growth accelerated in the three months to October and inflation rose to 2.6% in November, these pressures seem insufficient to prevent a gradual easing of rates in 2025. Meanwhile, the UK economy is showing signs of strain, with GDP falling to zero in the third quarter.

Trading recommendations

• Support levels: 1.2537, 1.2487, 1.2446
• Resistance levels: 1.2560, 1.2667, 1.2719, 1.2748, 1.2786, 1.2878

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. The price is slowing down and forming a flat accumulation below the support level of 1.2537. The intraday bias remains for sellers, so sell trades can be considered from the moving averages or from the 1.2560 resistance level. For buying, 1.2487 can be revisited, but only with confirmation in the form of buyers’ initiative.

Alternative scenario:

if the price breaks through the resistance level of 1.2667 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 156.35
• Prev. Close: 157.13
• % chg. over the last day: -0.61 %

Japanese Finance Minister Kato reiterated that Tokyo is concerned about excessive currency movements and warned speculators that the authorities are ready to act to stabilize the yen. He also added that it is important for the currency to move steadily, reflecting fundamentals, and the government is alarmed by currency fluctuations, including those influenced by speculators. The yen is trading near a five-month low at 157 per dollar, having lost 4.7% this month.

Trading recommendations

• Support levels: 156.98, 156.39, 154.93, 154.34, 153.14, 152.45, 151.94, 151.41
• Resistance levels: 157.36, 157.90

From a technical point of view, the medium-term trend of the USD/JPY currency pair is bullish. The price is forming a flat accumulation between the levels of 156.98–157.36. Intraday, the price tested the liquidity below 156.98 and consolidated above, indicating the buying pressure. However, sellers may react sharply at 157.36 as there is a large liquidity accumulation above that level. The price going below 156.98 is undesirable for buyers.

Alternative scenario:

if the price breaks and consolidates below the 153.14 support, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2623
• Prev. Close: 2611
• % chg. over the last day: -0.46 %

Gold slipped to $2,610 an ounce on Monday, weighed down by a strong US dollar and rising Treasury yields as investors await clearer signals on Federal Reserve policy toward 2025. The Dollar Index rose by 0.4% to a two-year high, making gold more expensive for holders of other currencies. 

Trading recommendations

• Support levels: 2609, 2617, 2580, 2559, 2471
• Resistance levels: 2620, 2640, 2673, 2693, 2700, 2721, 2733, 2749

From the point of view of technical analysis, the trend on the XAU/USD is bearish. Gold is also seeing a decline in volatility in the pre-Christmas period. The price is forming a flat accumulation in the 2609–2620 range and is likely to stay there until the end of the week. For trading, it is better to use intraday time frames and set short targets. For selling, the upper boundary of 2620 can be considered, but with confirmation. For buying, 2609 would be suitable, but we also need to see buyers’ reaction to the level.

Alternative scenario:

if the price breaks above the 2614 resistance level, the uptrend will likely resume.