Created on December 30, 2025

• The British pound has been pretty choppy during the Monday session as we continue to hover around the 1.35 level.

GBP/USD

The 1.35 level, of course, is a large, round, psychologically significant figure and an area that a lot of people will be watching, as it has been important a couple of times in the past. Nonetheless, I think we have a situation where there is a lack of volume. I do not know how much I read into the price action at the moment.

Yes, the US dollar has softened quite a bit over the last couple of weeks, but we also have to keep in mind that there are some concerns about the global economy. If that ends up being the case, it does make a certain amount of sense that the US dollar still has a bit of demand.

Fed Rate Cuts

Furthermore, you have to understand that some of the leading indicators and data have thrown a bit of a monkey wrench into the plans of those who are looking to sell off the US dollar based on loosening monetary policy. It is not that rare that the Federal Reserve starts cutting rates and then the US dollar strengthens shortly afterwards. That is mainly because it is a sign of potential stress in the system. However, the fundamentals do not matter if the price ends up doing something completely different.

At this point, if we do break out to the upside, I think the 1.37 level is a potential target, perhaps even the 1.38 level. If we turn around and break below the 1.3450 level, then we could go down to the 1.33 level. Ultimately, this is a market that I think is at a major inflection point, and we need to watch it very closely. I suspect that this is all about the US dollar, so watch the US dollar against other currencies. It could give you a bit of a heads-up.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Created on December 30, 2025

• The Euro pulled back a bit during the trading session on Monday against the Japanese yen, as we continue to see a lot of noisy overall trading behavior.

EUR/JPY

Nonetheless, the longer-term trend is most certainly to the upside, and I think that continues to be the major driver of where we go next. If we were to drop from here, the 182 yen level is an area that I think will more likely than not offer quite a bit of support, especially as the 50-day EMA is racing toward it. Remember, the interest rate differential still favors the Euro over the Japanese yen.

Because of this, I think traders will continue to try to hold this pair over the longer term, and getting paid at the end of every day certainly helps. If we were to break down below the 182 yen level, then I will be watching the 50-day EMA, presently at the 180.47 level and rising for support.

Upside Targets

To the upside, I see the 186 yen level as a potential target. The 185 yen level underneath there, of course, has a certain amount of psychology attached to it, but I think given enough time, we will slice through it. In fact, we almost did about a week ago, and I think you have a situation where we will continue to see buyers willing to take advantage of dips.

The Bank of Japan has recently raised rates, but quite frankly, the market didn’t seem too impressed by it, and as a result, I think the Japanese yen will continue to get punished for a whole host of reasons. I have no interest in shorting this pair but do keep in mind that if we get some type of major systemic fear out there, it does tend to benefit the Japanese yen. That correction would probably be a nice opportunity to get long again at an even better price.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Created on December 05, 2025

• EUR/GBP struggled to sustain early Thursday gains as renewed strength in the British pound weighed on the pair.
• A potential topping pattern and failure at the 50-day EMA point toward a possible move toward £0.87 and even £0.86 if support breaks.

The euro initially tried to rally against the British pound during the trading session on Thursday, but it looks as if the unwinding of negative bets against the British pound continues on Thursday. We initially tried to break above that 50-day EMA, but have given that back, and now it looks like the budget in the United Kingdom has allayed some of the fears that traders had about the British pound, and it is showing up here and many other currency pairs. With that being said, I am looking at a potential breakdown toward the 0.87 level. If we break down below the 0.87 level, I suspect that at that point in time, we make a move down to 0.86 and lower. This does look a lot like a topping pattern, and the sizable candlestick on Wednesday, of course, definitely makes this appear a very probable breakdown.

Choppy is Normal Here

This market typically is very choppy, to say the least, and as a result, you have to be very cautious, but I also look at this market as one that has been close to a major resistance barrier in the form of 0.89. And as long as we don’t break above there, I don’t know that the behavior of this pair will have changed drastically from a longer-term standpoint. While I don’t necessarily expect a massive shorting opportunity, I do think that overall, we are starting to see a shift in the pattern, and this suggests to me that maybe we have a trend change. It’s still early days, but with a little bit of caution, it is a trade that I might be willing to take.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.