The following is a rewritten and expanded version of the article titled “Pairs in Focus: 21st to 26th December 2025,” originally published on DailyForex.com. Authored by Forex expert Adam Lemon, the analysis explores key currency pairs and their technical setups for the trading week of December 21 to December 26, 2025. This updated interpretation brings in additional context, reinforcement from market data, and more in-depth technical insights drawn from various sources.
Forex Pairs in Focus: December 21 to 26, 2025
The trading week of December 21 to 26, 2025, is anticipated to be relatively low in volatility due to the Christmas holiday, which historically leads to thinned liquidity across global markets. Nonetheless, several forex pairs offer notable technical setups that may offer opportunities to traders, particularly intraday and swing traders who can adapt to shorter timeframes.
Adam Lemon’s original analysis pointed to a few core pairs to monitor this week. In this expanded version, we’ll examine the technical conditions and fundamentals for each key pair while incorporating additional analytical perspectives provided by global financial sources like TradingView, FXStreet, and other technical analysts.
Market Overview:
– The last full trading week of December brings light economic data, lower volume, and potential for exaggerated moves due to thin trading.
– Central banks have completed most policy decisions for the year, with monetary policy statements setting the stage for early 2026.
– Key attention remains on inflation trends, GDP data from major economies, and how central banks like the Federal Reserve, ECB, and Bank of Japan might respond going forward.
– US Dollar Index (DXY) traded higher last week, reclaiming a short-term support zone, suggesting continued interest in the greenback.
– Traders remain cautious, with technical breakouts serving as key signals in a reduced-liquidity environment.
Key Forex Pairs to Watch
1. EUR/USD: Consolidation with Bearish Bias
The EUR/USD pair remains in a downtrend, albeit into a consolidation pattern near the 1.0850 to 1.1000 zone. After peaking around 1.1130 in late November 2025, the euro has retreated amid stronger US dollar sentiment and cooling economic support within the Eurozone.
Technical Highlights:
– Daily Chart: Price remains beneath the 200-day simple moving average (SMA), reinforcing a medium-term bearish trend.
– Relative Strength Index (RSI) is neutral-around 48, suggesting possible rangebound trading this week.
– Key Resistance: 1.1000 psychological level, followed by 1.1130.
– Key Support: 1.0830 followed by 1.0750.
Fundamental Context:
– Eurozone inflation fell slightly in December, according to preliminary harmonized CPI, easing ECB’s hawkish pressure.
– US housing data and consumer durables beat expectations, reinforcing the dollar’s strength.
Expectations:
– Short-term momentum favors the dollar while broader consolidation persists.
– Any significant weakness in US data may cause EUR/USD to test 1.1000 again.
2. USD/JPY: Bullish Breakout in Play
USD/JPY broke out above a key channel towards the middle of December after the Bank of Japan opted to hold interest rates steady and gave dovish forward guidance. This, combined with rising US Treasury yields, pushed the pair closer to the 150.00 swing-high level.
Technical Highlights:
– Price closed above the 50-day SMA and 100-day SMA.
– MACD recently gave a bullish crossover; momentum supports further rally.
– Resistance Zones: 150.00, followed by 151.70 (2025 high).
– Support: 148.30, then 147.00.
Fundamental Support:
– Bank of Japan reiterated ultra-loose policy into Q1 2026.
– Fed officials reinforced the likelihood of only modest rate cuts in 2026, keeping yield spreads in USD
Read more on USD/CAD trading.