**EUR/USD, GBP/USD, and EUR/GBP Forecasts: Currencies Drift Around on New Year’s Eve**
*Based on the article by David Becker, originally published on FXEmpire*
**Overview**
As the last trading day of the year unfolds, forex market activity cools, reflecting typical thin holiday liquidity. Major currency pairs, including EUR/USD, GBP/USD, and EUR/GBP, shuffle sideways with limited participation. Key technical levels and macroeconomic factors will play critical roles as traders position themselves for 2024. With little in the way of economic data releases on New Year’s Eve, market participants largely await catalysts in January.
Below is an in-depth look at the recent price action and the factors shaping near-term forecasts for EUR/USD, GBP/USD, and EUR/GBP, as highlighted by David Becker in his analysis.
## Forex Market Context
– Major forex pairs display muted volatility during the final trading sessions of December.
– Holiday trading conditions bring reduced liquidity, often resulting in choppy or listless price action.
– Participants await clarity on the Federal Reserve’s monetary policy path for 2024, as well as developments from the European Central Bank and Bank of England.
## EUR/USD Technical and Fundamental Outlook
### Recent Price Action
The EUR/USD pair remains trapped within a well-established range as the year concludes. The euro has had a turbulent year, recovering from multi-decade lows against the U.S. dollar as eurozone inflation cooled and the Federal Reserve signaled its tightening cycle might be near an end.
– Year-end price: Hovering around 1.1040 to 1.1070
– Range contraction: Low volatility with neither bulls nor bears able to assert dominance
– Immediate resistance: 1.1120 (recent swing high)
– Immediate support: 1.0925 (recent swing low, 50-day and 200-day moving averages)
### Key Technical Levels
– **Support zones**
– 1.0925-1.0945: Confluence of moving averages and prior swing lows
– 1.0830: Multi-session bottom line and psychological round number
– **Resistance areas**
– 1.1120–1.1150: December high and trend-defining zone
– 1.1275: 2023 highs not revisited in Q4
### Factors Influencing EUR/USD
– **Federal Reserve expectations**: The prospect of earlier-than-expected U.S. rate cuts has fueled EUR/USD upside in late 2023.
– **ECB monetary policy**: Seen as comparatively less dovish, though economic growth concerns linger in the euro area.
– **Economic data**: December data has provided mixed signals for the eurozone. Inflation remains close to ECB targets, though growth is tepid.
### Short-term Forecast
With little to drive decisive moves, EUR/USD likely consolidates into the new year. Technicals point to a neutral to slightly bullish bias above 1.0925. Only a daily close below 1.0925 would expose the pair to further downside toward 1.0830.
**Outlook Summary**
– Expectation: Rangebound trade with potential for upside drift
– Key watch: Reaction to January’s Eurozone PMI data and U.S. Non-Farm Payrolls
## GBP/USD Technical and Fundamental Outlook
### Recent Price Action
Sterling has managed to stabilize against the dollar after a volatile 2023. The GBP/USD pair remains inside a well-defined consolidation zone that has capped advances and limited declines. The pound benefits from market expectations that the Bank of England will be slower to pivot to rate cuts than the Federal Reserve.
– Year-end price: Near 1.2730
– Short-term trend: Mild upward slope since mid-December
– Immediate resistance: 1.2800 (psychological and technical barrier)
– Immediate support: 1.2600 (recent base, below the 50
Read more on GBP/USD trading.