The following is a rewritten and expanded version of the article “Forex Pairs in Focus: 28 December 2025 to 02 January 2026,” originally published on DailyForex.com by Rex Mazza. This piece examines key forex pairs, their technical setups, important levels to watch, and the market context influencing trade decisions as the forex market transitions from the end of 2025 into the new year.
Forex Pairs Technical Outlook: December 28, 2025 – January 2, 2026
By Rex Mazza, DailyForex.com
As the forex market prepares to close out 2025 and move into the early days of 2026, volatility tends to decrease due to reduced trading volumes. However, low liquidity can produce erratic price movements and potential breakout opportunities. This week offers traders a chance to evaluate major currency pairs across various timeframes, focusing on technical chart formations, dominant trends, key resistance and support levels, and indicators signaling continuation or reversal.
Key Forex Pairs to Watch This Week:
EUR/USD – Bearish Bias Remains, Looking for Fresh Lows
– The EUR/USD pair continues to exhibit a bearish trajectory, with sellers maintaining control throughout December.
– Price action remains constrained below the 1.1000 mark, a psychological barrier that has acted as resistance multiple times over the past quarter.
– The 50-day simple moving average (SMA), currently near 1.0860, serves as immediate resistance. The 100-day SMA also looms overhead, confirming downward momentum.
– Support lies near the 1.0720 level, which aligns with the early November swing low. A break below this zone could open the path toward 1.0650 and potentially 1.0575.
– Technical indicators:
– Relative Strength Index (RSI) hovers near 40, suggesting bearish momentum without signaling oversold conditions.
– MACD histogram remains below the zero line, supporting downside pressure.
– Key short-term resistance to monitor remains at 1.0900. A daily close above this level could shift bias neutral.
GBP/USD – Consolidating, Resistance Holds at 1.2800
– The British pound trades in a sideways range against the US dollar, oscillating between 1.2610 and 1.2800.
– The pair lacks a clear directional trend as traders await further macroeconomic drivers and clarity on the Bank of England’s policy outlook for 2026.
– Resistance continues to build near 1.2800, where the price has rejected multiple attempts for a breakout.
– Support has held near the ascending trendline from late October, currently situated around 1.2630.
– Daily chart shows early signs of a potential triangle pattern forming, which could trigger breakout trades early in the new year.
– Technical indicators:
– RSI is balanced near 50, reflecting indecision.
– MACD line slightly above the signal line, indicating lackluster bullish attempts.
– A decisive close above 1.2800 would likely target 1.2975, while a drawback below 1.2600 puts focus on 1.2400.
USD/JPY – Uptrend Intact, Eyes on Policy Divergence
– The US dollar remains strong against the Japanese yen, driven by persistent yields in the US favoring the greenback and the Bank of Japan’s dovish policy stance.
– USD/JPY held above the 145.00 handle, solidifying its uptrend as higher highs and higher lows characterize its movement.
– The 200-day moving average indicates long-term bullish momentum, while the price continues to trade well above the 50-day SMA.
– If upward momentum continues, immediate resistance lies near the 148.70 region, with the next key level at 150.00.
– On the downside, support zones to watch
Explore this further here: USD/JPY trading.