Pairs in Focus: 28 December 2025 to 2 January 2026
Original article by: DailyForex.com
Rewritten and expanded by ChatGPT
As the trading week closes out the final days of 2025 and transitions into the New Year, financial markets often experience lower volume due to holiday periods. Nevertheless, several major currency pairs continue to present noteworthy technical setups and potential price movements that traders can monitor closely. The following analysis outlines several key forex pairs, providing a detailed technical outlook with possible support/resistance levels and trend continuations or reversals. Please note this version is an extended and adapted interpretation based on the original content provided by DailyForex.com.
Key Market Themes for the Week
– Holiday trading conditions may affect liquidity and volatility.
– US Dollar Index is broadly in focus with potential direction-setting effects across multiple pairs.
– Year-end positioning may trigger unexpected spikes or retracements.
– Ongoing geopolitical and macroeconomic uncertainties continue to influence sentiment across global currencies.
Technical Analysis Highlights for Major Currency Pairs:
EUR/USD – Testing Key Resistance
The euro has remained buoyant into the final week of 2025, advancing significantly from its lows in early October. The recent bullish momentum has pushed the pair near resistance levels that may determine whether continuation or pullback will dominate early 2026 trading.
Key Observations:
– The pair is hovering around 1.1150, a resistance level dating back to July 2023.
– Momentum indicators (RSI and MACD) are in bullish territory but nearing overbought levels.
– A daily close above 1.1200 opens the way to challenge 1.1275, followed by 1.1360.
– Support levels are noted near 1.1075 and lower at 1.1000, which aligns with the 50-day EMA.
Outlook:
– Bullish continuation possible if price holds above 1.1125.
– Watch for weakening volume due to year-end trading conditions that could cause whipsaw action.
GBP/USD – Momentum Weakening Near Resistance
The British pound has seen extended strength since November, but recent sessions have indicated waning momentum. With the Bank of England’s policy stance remaining relatively cautious, GBP/USD will require fresh catalysts to break higher.
Key Levels:
– Resistance is now being tested near the 1.2800 mark, a psychological level last approached in August.
– Short-term support rests at 1.2700, with the next level at 1.2630.
– 1.2500 remains a key medium-term pivot point in case of deeper correction.
Technical Indicators:
– RSI is dropping from overbought levels, signaling reduced bullish strength.
– Bearish divergence on the MACD histogram could trigger a pullback.
Outlook:
– Consolidation likely unless data surprises or risk-on sentiment boosts sterling.
– Traders should look for a decisive break above 1.2850 to confirm strength.
USD/JPY – Downtrend Continues Despite Support at 140.00
The yen has shown notable improvement against the US dollar through Q4 2025, recovering from multi-decade lows seen earlier in the year. A dovish Fed outlook coupled with market speculation of possible Bank of Japan policy adjustments has strengthened the yen, sending the USD/JPY pair lower.
Technical Perspectives:
– Price currently tests the key 140.00 psychological level, which has acted as support.
– The descending trendline from the 2025 high remains intact.
– Momentum remains bearish, with RSI near 40 and MACD negative.
Important Zones:
– Immediate resistance resides at 141.50 and 143.20.
– A close below 139.50 could accelerate bearish momentum toward 137.75.
Outlook:
– Bearish bias remains intact for the short term.
– Traders should monitor any BoJ shifts and US yield movements for catalysts that could alter the trend.
USD/CHF – Undecided Amid Sideways
Read more on EUR/USD trading.