Pairs in Focus: 7th to 12th December 2025
Original analysis by: DailyForex.com
The week spanning December 7th to 12th, 2025 presents a diverse outlook across the most widely traded currency pairs. As we approach the final stretch of the trading year, market sentiment remains influenced by macroeconomic events, central bank rhetoric, and technical positioning. Notably, the US dollar continues to demonstrate strength amid changing rate expectations, while geopolitical dynamics and inflation indicators from Europe and Asia also feed into overall volatility. This analysis, drawn from the original DailyForex article, explores key technical levels, potential breakouts, and fundamental catalysts shaping the currency markets across major and minor pairs.
EUR/USD Analysis: Bearish Momentum Persists
The EUR/USD remained under pressure for most of the prior week, continuing its downtrend driven by a stronger US dollar and mixed Eurozone data. Despite minor attempts to rebound, technical indicators suggest sellers maintain control.
Key Technical Highlights:
– The pair remains below the 200-day Exponential Moving Average (EMA), indicating sustained bearish momentum.
– Resistance continues to form around the 1.0850–1.0880 zone, which previously supported price before its breakdown.
– Support levels appear in the 1.0700–1.0730 area; a break beneath this zone could lead to further downside toward the 1.0630 area.
Market Catalysts:
– Hawkish Fed commentary persists, keeping the US dollar supported.
– Lagging Eurozone inflation and employment data have weighed on the euro.
– ECB officials appear divided on the pace and timing of quantitative easing withdrawal, adding to uncertainty.
Forecast Outlook:
A close below 1.0730 on a daily chart would confirm a breakdown and expose further downside. Conversely, a sustained move above the 1.0880 resistance zone might shift momentum in favor of the bulls, though this currently appears unlikely without a significant catalyst.
GBP/USD Analysis: Consolidation Before Directional Clarity
The British pound traded largely sideways during the previous week, finding balance between hawkish Bank of England signals and economic uncertainty related to tepid UK growth figures.
Technical Picture:
– The pair has been oscillating between 1.2520 support and 1.2690 resistance.
– The Relative Strength Index (RSI) remains neutral near the 50 level, not offering a clear trend signal.
– Price remains trapped between the 50-day and 100-day Moving Averages, representing uncertain near-term market sentiment.
Fundamental Considerations:
– The BoE still maintains a relatively more hawkish stance compared to the ECB, but traders remain cautious amid slowing consumer and business activity.
– Upcoming UK GDP and inflation prints are likely to dictate near-term directional bias.
– The dollar’s strength continues to cap GBP gains.
Potential Scenarios:
– A break above 1.2690 would open up the path toward 1.2750 and possibly 1.2800.
– Continued rejection at resistance could prompt another test of 1.2520, with further downside risk toward 1.2450.
USD/JPY Analysis: Bulls Regain Control
The USD/JPY resumed its upward trend after briefly correcting in late November. The pair responded positively to rising US Treasury yields and safe haven outflows from the Japanese yen.
Technical Structure:
– USD/JPY pushed above the 147.50 resistance zone, reaffirming the bullish structure.
– Technical support now rests around the 146.00 region, a key breakout level and prior weekly high.
– RSI is approaching overbought territory, suggesting short-term consolidation may occur before continuation.
Driving Forces:
– Expectations of diverging monetary policy between the Fed and the Bank of Japan continue to play a pivotal role.
– Japan’s inflation remains subdued, reducing the probability of a major BOJ policy shift in the short term.
– The US continues to post resilient macroeconomic data, backing the Fed’s hawkish tone.
Read more on EUR/USD trading.