Pairs in Focus: 28 December 2025 to 2 January 2026
(Original analysis by Christopher Lewis, DailyForex)
As the Forex market heads into the final days of 2025 and into the new year, trading activity is expected to be subdued due to the holiday season. However, several currency pairs still offer insight into future directional momentum, and traders are watching key technical levels that may shape the early days of 2026. This article provides a detailed technical overview of some of the most watched Forex pairs for the week spanning December 28, 2025 to January 2, 2026.
EUR/USD
The euro has shown resilience, holding steadily above the important 1.09 level. This pair has experienced moderate upward movement in recent sessions, especially after finding support near the 1.0850 mark.
Key Observations:
– The 1.09 level now acts as a short-term support zone, and a break below it could lead to a more significant selloff.
– Resistance is found around 1.10, and a daily close above that point could indicate renewed bullish interest.
– The series of higher lows in recent weeks suggest that buyers are slowly regaining control.
– Indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are showing modest bullish momentum, though the thin year-end volume might skew short-term signals.
Looking ahead, the pair may enter a consolidation phase unless macroeconomic data early in January brings a clearer fundamental driver. Traders should closely watch the Eurozone inflation figures and any Federal Reserve communication in early January.
GBP/USD
The British pound continues to stay firm against the US dollar, showing signs of bullish persistence. Last week, the pair bounced back from the 1.27 level, which now appears to be forming a critical support zone.
Notable Developments:
– The 1.27 level remains a significant short-term floor, while the 1.28 region is acting as near-term resistance.
– The pair has formed a tight consolidation triangle, indicating a potential breakout in the near future.
– If the pair can close above 1.2820, a move toward 1.30 could be on the horizon.
– Momentum indicators suggest the path of least resistance may still be upward, with RSI remaining above 50 and MACD showing positive divergence.
Fundamentally, the UK growth outlook and expectations for Bank of England monetary policy will play major roles in shaping direction. Early January data releases from the UK could influence whether the pound continues to climb or retraces back to 1.27.
USD/JPY
The US dollar has declined somewhat against the Japanese yen, reflecting a general weakness in the greenback over the past few weeks. A dip beneath 143.50 has shifted short-term sentiment toward the bearish side.
Technical Highlights:
– The 143.50 level, which until recently acted as support, could now become resistance.
– A further breakdown could test the 141.00 region, which is the next major support zone.
– The 50-day moving average has rolled over slightly, suggesting diminishing bullish momentum.
– Volume remains weak, but technicals imply selling pressure is beginning to mount.
Should the yen continue to be seen as a safe-haven, particularly in light of any early-2026 geopolitical shifts or fading expectations of US rate hikes, USD/JPY could retest the 140 level. On the upside, only a strong bounce and daily close above 145 would revoke the bearish short-term outlook.
AUD/USD
The Australian dollar remains rangebound but with a slightly bullish tone against the US dollar. Holding above the 0.6750 level, it continues to flirt with the top of the recent consolidation pattern.
Key Price Points:
– Support is stable around 0.6700, while resistance is marked by the 0.6850 zone.
– The Bollinger Bands have narrowed, often a signal that a
Explore this further here: USD/JPY trading.