• The EUR/JPY cross may depreciate further as the daily chart analysis suggests a prevailing bearish bias.
• A corrective move could be indicated once the 14-day RSI falls below the 30 mark.
• The primary support appears at the descending channel around the psychological level of 159.00.

EUR/JPY extends its losses for the second consecutive day, trading around 159.60 during the Asian hours on Wednesday. Technical analysis of the daily chart shows the pair is moving downwards within the descending channel pattern, suggesting an ongoing bearish bias.

Additionally, the 14-day Relative Strength Index (RSI) is positioned slightly below the 30 level, confirming the bearish sentiment for the EUR/JPY cross. A dip below the 30 mark would indicate an oversold situation and direct a corrective rebound.

In terms of support, the EUR/JPY cross may find primary support at the lower boundary of the descending channel around the psychological level of 159.00, followed by a two-month low of 158.10, recorded on September 30. A break below this level could strengthen the bearish sentiment and put downward pressure on the currency cross to navigate the area around its 11-month low of 154.41, which was recorded in December 2023.

On the upside, the EUR/JPY cross may approach to test the upper boundary of the descending channel near the nine-day Exponential Moving Average (EMA) at the 161.80 level, followed by the 14-day EMA at 162.43. A decisive breach above these levels would cause the emergence of the momentum shift from bearish to bullish and support the pair to re-test a four-month high of 166.69, a level last seen on October 31.

EUR/JPY: Daily Chart

• EUR/GBP might be unfolding a bullish leg within a sideways range.  
• The MACD has crossed its signal line and is above zero, – a bullish sign. 

EUR/GBP is clawing its way back up within its multi-week range. It is possible that this may be the start of an up leg within the range towards the ceiling at around 0.8450.

The pair is probably in a sideways trend on a short-term basis and given the principle of technical analysis that prices are more likely to extend in the direction in which they are trending it will probably continue oscillating in its sideways trend until it makes a decisive breakout either higher or lower. It is overall at two and a half year lows. 

EUR/GBP 4-hour Chart 

EUR/GBP made a false break lower on November 8 and then, a second time, on an intraday basis, on November 22. On both occasions it failed to follow-through lower, however, and instead just recovered back inside the range. 

Because it is in a sideways trend the odds favor a continuation sideways, which suggests the possibility of a recovery from the current level up to ceiling. 

A break above 0.8375 would probably lead to a continuation higher to a target at 0.8440, just below the ceiling. 

The Moving Average Convergence Divergence (MACD) momentum indicator, which is a reliablñe indicator in sideways markets has crossed above its red signal line and is also now above the zero line suggesting a bullish short-term bias.

Created on November 26, 2024

• The EUR/USD currency pair’s attempt to recover at the end of last week with gains to the 1.0530 level quickly evaporated and returned downward this week.
• Today, the euro-dollar pair plummeted today to the support level of 1.0425 ahead of important US data.
• The performance confirms our technical view that the EUR/USD will remain in its downward range and any upward rebound may be a selling opportunity.

Will the EUR/USD rise in the coming days?

So far, most technical and momentum indicators are still clear in expecting further decline in the performance of the EUR/USD pair. Accordingly you should expect more weakness. Subsequently, if the selling wave returns, the lowest support levels recorded by the currency pair in recent trading sessions at 1.0331, the lowest for the currency pair in two years, will be retested, followed by a test of the support level at 1.02. However, tactically, there is room for some strength in the coming days with a correction of the recent excessive selling levels. The relative improvement in the performance of the currency pair came after the announcement of the candidate for the position of US Treasury Secretary, which gave some optimism to investors and markets.

The State of the German Economy and Its Impact

According to forex market trading, the euro price was affected by economic data that showed that the German Ifo business climate index fell from 86.5 in October to 85.7 in November, weaker than the expected reading of 86.0. In the same announcement, the current conditions index fell from 85.7 to 84.3 and the expectations index fell from 87.3 to 87.2. Overall, the reading confirms that the German economy is still in recession. Therefore, the outlook for next year 2025 is also weak as the loss of competitiveness in industry. Moreover, the adverse demographic structure is likely to offset any boost from recovery in real household incomes and monetary easing.

Concurrently, the BCI index is consistent with a sharp contraction in German GDP, as is last week’s November Purchasing Managers’ Index survey. Also, the composite Purchasing Managers’ Index fell further into recession territory in November. The next major release will be eurozone inflation figures, which could determine whether the European Central Bank (ECB) will cut interest rates by a large 50 basis points in its interest rate decision next month.

European Inflation Figures Under the Microscope

According to this week’s economic calendar, forex traders will be focusing on the official German inflation figures next Thursday. Similarly, Spain releases inflation figures on the same day. As is well known, the German and Spanish releases often serve as a good guide to where the Eurozone inflation release – due on Friday – will fall and because of this, the impact on the Euro could be significant if there are any surprise deviations from expectations.

Meanwhile, Eurozone inflation is forecast to rise to 2.4% from 2.0% in October, which would ensure the ECB sticks to a 25-basis point cut next month. However, if inflation data comes in lower than expected, the ECB may consider cutting interest rates by a larger amount, especially in light of last week’s disappointing PMI data. If so, the euro could come under pressure against other major currencies, especially the US dollar.

Trump’s Policies Continue to Support the US Dollar

The US dollar continued to make further gains against other major currencies. Optimism was dampened by the name of the new US Treasury Secretary. Furthermore, Trump promised that he would impose an additional 10% tariff on goods from China. Comparably, he pledged to impose 25% tariffs on all products from Mexico and Canada, which led to a decline in their currencies by about 1% each. Simultaneously, the US dollar index DXY returned to stability above the 107.00 resistance, near its highest level in two years.

In general, risk sentiment is now collapsing due to the risks of Trump’s tariffs – the dollar is seen as a safe haven. According to reliable trading platforms, the US dollar recorded gains today against all currencies except the Japanese yen in Asian trading. In the same performance, the 10-year Treasury yield rose by 2 basis points to 4.29% after declining by 13 basis points in the last session.

EUR/USD Analysis Today:

Technically, the overall trend of the EUR/USD currency pair remains downward. As we previously advised, dear reader, you should expect any gains for the EUR/USD currency pair to evaporate quickly and the expectations of the EUR/USD parity become stronger. Currently, the closest support levels are 1.0420, 1.0330, and 1.0200, which are sufficient to push all technical indicators towards oversold levels.

EUR/USD Trading Signals:

No matter how strong and accurate the analysis is, you should always work with a trading strategy of not risking and activating profit and stop loss orders to ensure the safety of your trading account from any price surprises, especially in the Trump era.

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Created on November 26, 2024

• During the trading session on Monday, we have seen a little bit of a pullback in the British pound against the Japanese yen to test the crucial 200 day EMA.
• That being said, the 200 day EMA has held so far, and it looks like we are trying to build up enough pressure to turn around and break to the 195 yen level.
• If we can clear that level, then I think it opens up the possibility of a move to the 200 yen level.

All things being equal, GBP/JPY is a pair that is highly sensitive to risk appetite, so you do have to keep that in mind. So, it’ll be interesting to see how we behave over the next couple of days as this pullback has been a little bit of relief for those who got a little stretched. And now we have to see whether or not sideways action will build enough of a base here in order to continue to go higher. If we do break higher and clear the 50 day EMA, then I think we’ve got a situation where the market goes looking to the 200 yen level. If we can break above there, then the 207.50 yen level could be the target.

If We Break Down

On a breakdown below the 200-day EMA, I believe that the 190 yen level will offer a significant amount of support. Keep in mind that the Bank of Japan continues to be fairly loose with its monetary policy, despite the fact that occasionally they will jawbone the market. The interest rate differential does pay you at the end of every day, and I think a lot of traders will continue to pay close attention to this on a move above the 195 yen level, I do think that more traders will jump in and try to catch a little bit of a FOMO trade at that point.

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Created on November 26, 2024

• The British Pound has pulled back just a bit during the early hours on Monday as we continue to see a lot of noisy behavior.
• With this being said, I think we’ve got a situation where the 1.25 level continues to offer significant support, an area that also has been very important multiple times.

If the GBP/USD market were to bounce from here again, then we could see a move to the 1.27 level, which is an area where we had bounced from and then came back below it, only to bounce back to the downside once we reached it again. In other words, there should be a lot of market memory in this area. If we can break the above there, then we have the possibility of going to look at the 200-day EMA.

On the Other Hand

On the other hand, if we were to break down below the 1.25 level, then it opens up the possibility of a move down to the 1.23 level, an area that I think will continue to be important as it also has a lot of market memory. All things being equal, the US dollar is by far one of the strongest currencies in the world right now. And while the British pound itself isn’t too bad, it’s not the US dollar.

So, I still think this is a market that rallies will get faded at the first signs of exhaustion, and therefore I’m looking for selling opportunities. If we do break above here, then I think we’ve got a lot of work to do to turn things around. This isn’t to say that we won’t get the bounce that looks like it’s trying to set up, because quite frankly, a little bit of profit taking might make a certain amount of sense. But nonetheless, at this point in time, I think you’ve got a lot of work to go before we can truly turn things around for a longer term move.

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Created on November 26, 2024

• Dear my daily analysis of the USD/JPY pair, the market has shown itself to be rather flat, which is not overly surprising, considering that we had been consolidating for a couple of weeks previously.
• The ¥155 level continues to be a bit of a barrier, but if we can break above there I think it will release quite a bit of kinetic energy in this pair.

Keep in mind that this is a market that still has a positive swap, and that will continue to be a major factor in how people approach it. After all, the Bank of Japan can do nothing to tighten monetary policy at this point, because quite frankly there is so much in the way of debt that is attached to the Japanese economy that it would completely implode domestic conditions if they approached to aggressively.

Technical Analysis

I believe that the ¥155 level is crucial, and if we can break above there could open up a move to the ¥160 level. The 50 Day EMA has recently broken above the 200 Day EMA, roughly at the ¥150 level, kicking off the so-called “golden cross” that a lot of longer-term traders pay close attention to. The market has been bouncing rather significantly over the last month or so, and we have seen the Japanese yen lose quite a bit of strength. Perhaps we are entering an area of digestion, which would make quite a bit of sense considering that we had reached the ¥150 level in rather short order.

Going forward, it does look like this is a “buy on the dips” type of market, with the 50 Day EMA offering potential support near the ¥151.50 level. After that, we have the 200 Day EMA sitting just above the ¥150 level, which of course is an area that would attract a lot of attention from a large, round, psychologically significant figure standpoint, and of course the same indicator that most trend followers pay close attention to over the longer term anyway. I remain bullish, but I recognize we may be a bit noisy in the short term.

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Created on November 26, 2024

• In my daily analysis of the EUR/USD pair, it looks like the euro is simply treading water, just below the crucial 1.05 level.
• This is not much of a surprise, considering that we have plunged so drastically to the downside that the market is almost certainly oversold at this point.
• This isn’t to say that I think we need to be buyers of this pair, just that I think a balance is probably more likely than not.

In fact, it’s probably worth noting that we initially tried to rally during the trading session on Monday but gave back those gains rather rapidly.

Because of this, I think you have got a situation where traders are going to continue to see a lot of volatility in this pair, and that does make a certain amount of sense considering that the European Union has a whole host of issues to worry about. After all, we’ve got a situation where there is a hot war on the continent that is only getting worse, so that in and of itself probably makes some traders a little bit cautious about being involved in the European Union.

US Elections

The US elections have been like a shot in the arm for the US dollar and US equities overall. I think that continues to be the case, but it’s also worth noting that the market is paying close attention to the interest rate situation in the United States, as they have been rising, despite the fact that the Federal Reserve has been cutting. With this being the case, think you get a situation where traders will continue to look at this through the interest rate differential argument, but then again you also have to keep in mind that the US is more likely to be business friendly than the European Union now that Donald Trump is taking over.

We also have the idea of safety as far as the US dollar is concerned, and I think that continues to be the case here. After all, the world is a somewhat scary place at the moment, and that means that the US dollar might be where people run to.

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• GBP/JPY has fallen consistently during November, weakening by seven Yen to the Pound.
• It may now be in a bear trend both in the short and medium term, suggesting the odds favor more downside still. 

GBP/JPY may have reversed both its short and medium-term uptrends after the last bout of weakness. If so, the pair could see more downside on the horizon since it is a principle of technical analysis that the odds favor extensions of trends.

GBP/JPY Daily Chart 

GBP/JPY began selling off on October 31 after it peaked at 199.81 on the preceding day. Since then it has staircased down, reaching a new low in the 192.80s on November 22 – seven whole Japanese Yen (JPY) to the Pound Sterling (GBP) lower than at the end of October.

It has also broken below all three major Simple Moving Averages (SMA), the 50, 100 and 200-day SMAs on a closing basis. 

The (blue) Moving Average Convergence Divergence (MACD) momentum indicator line has both crossed below the red signal line and below the zero level, and taken together these are  bearish signs.  

A break below the 192.80 level could open the way to further losses with the next target at around 189.56, the low of the Right-Angled triangle that formed in late September and early October. 

Created on November 25, 2024

• Despite risk aversion among investors, the US dollar remains more attractive to buy than the Japanese yen, even though both currencies are among the most important safe havens in times of uncertainty.
• Trump’s trade continues to support the strength of the US dollar.
• During last week’s trading, the US dollar against the Japanese yen USD/JPY pair jumped towards the resistance level of 155.88, near the highest for the currency pair in four months.

According to the Forex market trading, the price of the US dollar / Japanese yen rose by 1.79% during the trading of the current month. Moreover, the currency pair rose by 9.75% during the trading of the year 2024.

Decline in Japanese Inflation and its Impact on Central Bank Policy

According to economic data, Japan’s core inflation rate slowed to a 9-month low of 2.3% in October, while the underlying inflation rate also fell to 2.3%, the lowest in six months, and slightly above expectations of 2.2%. On the other hand, Japan’s manufacturing sector contracted more than expected in November, despite growth in services activity.

On the monetary policy front, the Bank of Japan’s governor has indicated the possibility of raising interest rates again as early as December, citing the recent weakness in the Japanese yen. In addition, the Japanese prime minister is considering a $90 billion stimulus package to ease the impact of rising prices on households. However, the strong dollar and US Treasury yields have prevented the low-yielding Japanese yen from rising more than its recent performance.

Moreover, a Japanese survey showed that Japanese companies in China have become more pessimistic about the world’s second-largest economy, with about two-thirds saying it is getting worse and nearly half cutting or halting their investments. About 64% of Japanese companies said the Chinese economy is worse than last year, according to the latest survey by the Japan Chamber of Commerce and Industry in China.

USD/JPY Technical Analysis and Expectations Today:

The overall trend of the USD/JPY currency pair remains upward. The 14-period Relative Strength Index still has room to rise before moving towards oversold levels, which could happen if the bulls manage to push the pair towards the resistance levels of 155.85 and 157.00, respectively. The USD/JPY pair will remain within its current range until the return from the US holidays this week, which may affect liquidity and investor sentiment to start trading normally.

Conversely, and on the same timeframe, the upward trend of the USD/JPY currency pair will be breached if the bears return the pair towards the support level of 151.60. Otherwise, the overall trend will remain upward. We see that any downward movement of the currency pair may be an opportunity to buy. You can follow the trading signals for the USD/JPY and other free live trading signals on our website.

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Created on November 25, 2024

• The continued strength of the US dollar since Trump’s victory has been supporting the downward trend of the GBP/USD currency pair, which recently plunged to the support level of 1.2487, the pair’s lowest in six months.
• Before closing the week’s trading around the 1.2528 level, the downward performance is expected to continue until new strength factors emerge for the sterling.
• According to forex market trading, the GBP/USD pair has declined by 2.86% since the beginning of this month. Recently, the pound sterling has depreciated by 1.59% against the US dollar since the beginning of 2024.

Disappointing UK Economic Performance

The UK prime minister has pledged to achieve sustainable economic growth of 2.5% a year and improve living standards, a challenge for an economy that has been suffering from almost stagnant productivity since the global financial crisis of 2008-09. According to the economic calendar results, UK inflation accelerated more than expected in October to well above the Bank of England’s 2% target. UK consumer price inflation was reported to have risen by 2.3% from a year earlier after rising energy bills. Services inflation – closely watched by price makers for signs of domestic pressure – remained high at 5%.

The performance of the pound sterling against the dollar will remain under significant pressure, which is understandable given that the US economy continues to grow at a strong pace, with more growth expected in the future as Donald Trump’s pro-growth policies are awaited. Compare this to the situation in Britain, where the new government has hit businesses with huge tax increases, minimum wage hikes, and additional burdens from labour law.

Future of Bank of England Policy

Market pricing shows that investors have raised their expectations for the number of interest rate cuts that the Bank of England will make next year from two to three. Currently, the chances of a UK interest rate cut in December remain low, but a cut in February 2025 is now fully priced in.

Technical Analysis for the GBP/USD pair today:

According to the daily chart performance, the overall trend of the GBP/USD currency pair remains downward. As mentioned before, moving below the 1.2500 support level will further strengthen the bears’ control of the trend. The continued strength of the current US dollar factors may push the GBP/USD pair to stronger downward levels, the closest of which are currently 1.2465, 1.2330, and 1.2200, respectively, which in turn will move all technical indicators towards oversold levels. Furthermore, any upward rebound of the GBP/USD pair will be a target for selling again for now.

You should note that the US holidays this week may negatively affect sentiment and liquidity in the markets. Therefore, it is wrong to make decisions until after the holidays and the volume of liquidity returns to avoid sudden movements that affect trading investments. Also, you can view free live trading signals for the GBP/USD pair and other distinctive trading signals on our website.

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