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.

Begin trading our daily forecasts and analysis. Here is a list of Forex brokers in Japan to work with.

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.

Created on December 29, 2025

EUR/USD Analysis Summary Today

• Overall Trend: Bullish
• Support Levels for EUR/USD Today: 1.1745 – 1.1680 – 1.1600.
• Resistance Levels for EUR/USD Today: : 1.1830 – 1.1880 – 1.1930.

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1690 with a target of 1.1820 and a stop-loss at 1.1600.
• Sell EUR/USD from the resistance level of 1.1830 with a target of 1.1500 and a stop-loss at 1.1900.

Technical Analysis of EUR/USD Today:

The Euro is stabilizing against the US Dollar (EUR/USD) near the 1.1800 resistance as the final trading days of 2025 begin. This sets the stage for a strong performance heading into 2026. According to top-tier trading platforms, Euro trading has remained positive, fueled by market expectations regarding the future policies of the US Federal Reserve compared to those of the European Central Bank (ECB).

Amidst quiet holiday trading between Christmas and the New Year, the exchange rate settled near 1.1772. The US Dollar remains under pressure despite strong US growth data. Recently, financial markets have shifted their focus toward Federal Reserve policy outlooks and concerns over central bank independence, rather than short-term economic activity indicators.

With long positions on the euro increasing, the potential for further gains may depend on the emergence of new catalysts in early January.

Will the Euro’s gains continue in the coming days?

According to forex market trading, the euro (EUR) remained stable in global markets last week, while the dollar remained under pressure despite better-than-expected US GDP data. Consequently, the EUR/USD exchange rate reached its highest level in three months, approaching 1.1810, before settling slightly below 1.18.

Regarding factors influencing currency prices, any developments related to the incoming Federal Reserve Chair and other US central bank officials will be closely monitored. Looking ahead, MUFG Bank anticipates further limited net losses for the dollar in 2026 due to interest rate changes. They stated, “We expect the European Central Bank to maintain its current monetary policy throughout 2026, justifying the EUR/USD exchange rate’s rise in short-term yield movements, given that the Federal Reserve is poised to cut interest rates at least three times, exceeding expectations.”

After an initial stabilization, the bank expects the EUR/USD exchange rate to reach 1.24 by the end of 2026.

Trading Advice:

Traders advise caution when trading during periods of low market liquidity, a natural reaction to holidays in many financial markets.

2026 Trading Outlook:

According to currency trading experts, the US dollar is likely to remain vulnerable to volatility in global markets until the start of the new year. However, the latest Commitments of Traders (COT) data from the Commodity Futures Trading Commission (CFTC) shows an increase in non-commercial long positions in the euro to nearly 145,000 contracts from 138,000 contracts previously, its highest level in two years. This concentration will increase the risk of a euro correction early next year. Very strong resistance is also likely for the EUR/USD pair on any move towards the psychological resistance level of 1.20.

On the Economic Front, US GDP data for the third quarter showed annualized growth of 4.3%, compared to 3.8% previously, exceeding analysts’ expectations of 3.3%. Consequently, financial markets are currently trading at a probability of less than 15% for another US interest rate cut by the Federal Reserve in January, with two further cuts expected in 2026.

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Created on December 29, 2025

Potential signal:

• I am fine with buying this pair at these levels, with a target of 158 and a stop at 155.
• The US dollar continues to see range-bound behavior against the Japanese yen on Friday.
• The US dollar has rallied just a bit against the Japanese yen in what would have certainly been thin Friday trading.

Half of Europe was celebrating Boxing Day or something similar to it, and the United States, although technically open, has most people away from work and ignoring the markets in general.

The market has done exactly what you would expect in the scenario that we find ourselves in, and it’s continued the overall consolidation. The interest rate differential does favor the US dollar, and therefore I think there’s nothing wrong with buying it, but I do recognize that there’s a very real anti-US dollar sentiment at the moment and that will lead to more volatility.

The 50-day EMA sits right around the 154.50 level, which is basically the floor in the consolidation that we have been involved in for the entire month of December.

Market Sentiment and Interest Rates

Over the longer term, I would still favor the US dollar over the Japanese yen. That’s not really a US dollar call; that’s more about the Japanese yen than anything else, as you can see several other currencies around the world working their way higher against the yen as well.

The Bank of Japan did hike rates, but I think traders at this point in time have voiced their opinion of that as the Japanese yen continues to be fairly soft.

It is not until we break down below the 153 yen level that I even begin to have the conversation of maybe the trend could be changing. I’m a buyer of dips. I think we’ll get back to 158 yen, and I do think we eventually break above there.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

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.

The EURJPY pair began with clear negativity this morning, by forming a new corrective decline by targeting 183.75 level, due to providing negative momentum by stochastic by reaching below 50 level, besides forming extra barrier at 184.40 level.

We expect providing more corrective attempts, which might target 183.55 level reaching the main support at 183.05, while surpassing the mentioned barrier and holding above it will confirm its readiness to renew the bullish attempts, repeating the pressure on 184.90 level to find an exit to record new historical gains in the upcoming period.

The expected trading range for today is between 183.05 and 184.00

Trend forecast: Bearish

Created on December 29, 2025

• The British Pound has outperformed most of its contemporaries against the US dollar, so even if the US dollar finds quite a bit of strength, it is more likely than not that the British Pound drifts lower, but at a slower speed.
• The British Pound initially rallied during the trading session on Friday, but then gave back quite a bit of significant momentum.
• With that being the case, traders will likely look at this through the prism of a market that is going to try to either break out or form a bit of a consolidation range.

I do believe that in the next couple of weeks we will make a significant decision, but as things stand right now, it looks very much like a market that I think is going to continue to see a lot of questions asked of it near the 1.35 level.

Levels to Watch

The 1.35 level is a level that I think has been important multiple times. If we pull back from here, and I think we could, the 1.34 level is an area that would be your initial target. Breaking down below there, then opens up the possibility of a drop down to the 1.32 level. All things being equal, I suspect that might be the initial move to a bigger pullback.

However, we have to understand that the US dollar will probably move in the same direction against most currencies and not just this one. So, with this, I think you have a scenario where if we were to break above the 1.36 level, then it is obvious that we have a much bigger move to the upside waiting to happen, perhaps to the 1.38 level. I do expect a lot of choppy and noisy behavior, but I also recognize that the British Pound has outperformed most of its contemporaries against the US dollar. We are at a major point of inflection that we need to be watching.

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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.

US Economic Data and the Fed in Focus

Later on Monday, US economic indicators are likely to influence US dollar demand and USD/JPY. Pending home sales and the Dallas Fed Manufacturing Index will be in focus. Given the strong third-quarter GDP numbers, the Dallas Fed Manufacturing Index will likely influence sentiment more than housing sector numbers.

Economists expect the Dallas Fed Manufacturing Index to increase from -10.4 in November to -2.5 in December.

A weaker-than-expected Dallas Fed Manufacturing index would signal a loss of economic momentum, weighing on the US dollar.

While the data will influence US dollar demand, Fed commentary will be key. Support for further rate cuts on inflation outlook and a weaker labor market would weigh on the US dollar, pushing USD/JPY lower.

According to the CME FedWatch Tool, the probability of a March Fed rate cut increased from 53.3% on December 26 to 54.8% on December 27.

Looking ahead, the prospects for further BoJ rate hikes, a new Fed Chair, and a deteriorating US labor market are likely to remain the key themes. These scenarios continue to support a bearish short- to medium-term outlook for USD/JPY.

Technical Outlook: USD/JPY on a Downward Trajectory

For USD/JPY price trends, technical indicators, and fundamentals will require close monitoring.

Looking at the daily chart, USD/JPY remained above its 50-day and 200-day Exponential Moving Averages (EMAs), indicating a bullish bias. While technicals remained bullish, fundamentals are outweighing the technical structure, indicating a bearish outlook.

A drop below the 155 support level would bring the 50-day EMA into play. If breached, the 200-day EMA would be the next key technical support level. Crucially, a sustained break below the EMAs would signal a bearish trend reversal, paving the way toward 150.