Pairs in Focus: Forex Technical Analysis for December 21–26, 2025
Original Author: Maurice White (as published on DailyForex.com)
Rewritten and Expanded by [Your Name]
As the trading week spanning December 21 to 26, 2025, comes into view, several major currency pairs exhibit technical setups that could deliver both opportunities and risks. Although December tends to bring lower liquidity due to year-end holidays, traders remain vigilant for breakouts, trend reversals, and continuation patterns. This analysis highlights key currency pairs that deserve close attention this week, focusing on their recent price action, potential support and resistance levels, and overall trend strength.
The week starts with global markets generally stabilizing following central bank meetings earlier in the month. Uncertainty remains, however, due to inflationary pressures and mixed economic data out of the United States, Eurozone, Japan, and the UK. This macroeconomic backdrop plays a critical role in shaping trader sentiment.
Here’s a comprehensive technical breakdown of major and minor forex pairs heading into the last full trading week of December 2025.
EUR/USD: Bearish Trend Facing Key Inflection Point
The EUR/USD remains entrenched within a wider downtrend, although recent price action suggests a potential pause in bearish momentum.
– The pair closed last week below the 1.0900 psychological level, extending losses after the latest U.S. inflation data surprised to the upside.
– Momentum indicators such as RSI and MACD suggest that bearish strength is beginning to ease, but no reversal signals are confirmed yet.
– The near-term support zone rests at 1.0800, which was tested earlier in the quarter. A break below this level would expose 1.0725 and then 1.0650.
– Resistance levels to watch include 1.0930, followed by 1.1000. Any climb above 1.1000 would signal a potential shift in sentiment.
– Traders will closely monitor Eurozone CPI data and U.S. core PCE expected this week for additional clues.
Outlook: Bearish bias remains intact, but the downward trend may stall temporarily pending stronger directional impulses from data.
GBP/USD: Bullish Recovery Faces Resistance Headwinds
Sterling has shown resilience in recent weeks, with GBP/USD bouncing off the 1.2500 level. Technical signals point to a short-term bullish recovery attempt, although upside traction remains challenged.
– The pair closed last week at 1.2705, registering modest weekly gains as UK data beat expectations.
– The 50-day moving average has just crossed above the 200-day MA, suggesting medium-term bullish momentum could be building—a Golden Cross pattern.
– Immediate resistance lies at 1.2750, with a clean break potentially exposing 1.2820 followed by 1.2900.
– Downside support is seen at 1.2600 and then at 1.2500. A fall below these could revive bearish pressures.
– The RSI indicator is approaching overbought territory, indicating buyers may face exhaustion before year-end.
Outlook: Neutral-to-bullish in the near term. A strong UK GDP release or hawkish BOE rhetoric could propel the pair toward 1.2900 before December closes.
USD/JPY: Watch for a Breakdown Below 140.00
The USD/JPY has seen increased volatility following dovish leanings from the Federal Reserve and renewed discussions from the Bank of Japan on possible policy normalization.
– The pair closed the week under 142.00, with lower highs forming on the daily chart.
– A descending triangle pattern appears to be developing, with significant support resting at 140.00.
– A break below 140.00 would open the way for a drop toward 138.30 and possibly 137.00.
– On the upside, resistance comes in at 143
Read more on EUR/USD trading.