Title: Morning Briefing: EUR/USD Encounters Firm Resistance Near 1.18 Level
Author: Originally written by Anindya Banerjee for FXStreet
Date: December 28, 2025
The Forex market opened this morning with a cautious tone as traders and investors braced for subdued trading volumes amid the year-end holiday period. While major currency pairs saw limited volatility, EUR/USD continues to be a key focus due to its proximity to a significant resistance zone near 1.1800. A combination of technical indicators and macroeconomic fundamentals suggests consolidated movement in the near term, with potential for directional shifts if key levels are breached.
Below is a comprehensive analysis of the major currency pairs, updated based on the original insights from Anindya Banerjee at FXStreet. This analysis reviews recent performance, technical levels, and market sentiment across several pairs, providing traders with actionable insights.
EUR/USD Near Critical Resistance at 1.1800
– The EUR/USD pair is resisting upward momentum as it approaches the 1.1800 level.
– Immediate resistance is observed at 1.18, a historically significant level marked by prior price congestion.
– On the downside, support lies around 1.1700. Below this, the next set of support levels can be found at 1.1650.
– The pair has largely been trading within a narrow band, reflecting market indecision heading into the New Year.
– The daily Relative Strength Index (RSI) stands close to 60, suggesting the pair is neither oversold nor overbought.
– Trendline resistance from the highs made in November continues to suppress bullish momentum.
Fundamentally, the euro has had a mixed December. On one hand, moderate inflation in the Eurozone has reduced expectations that the European Central Bank (ECB) will accelerate rate hikes. On the other, the U.S. dollar has been broadly weaker due to declining Treasury yields and growing expectations that the Federal Reserve may start cutting rates by mid-2026 if inflation continues to trend downward.
GBP/USD Eyes 1.30 as Bullish Momentum Builds
– Sterling is gaining ground, with GBP/USD closing in on potential resistance at 1.3000.
– Support lies at 1.2820, followed by a stronger support zone at 1.2700.
– As long as buyers defend the 50-day moving average near 1.2750, the pair could rally towards 1.30 in the coming days.
– Financial market participants have turned more bullish on the pound due to improving UK economic data and expectations of an earlier-than-anticipated Bank of England (BoE) policy pivot.
While the BoE has refrained from adopting a dovish stance, market futures are increasingly pricing in rate cuts by the second half of 2026. This has created speculative momentum in GBP, helped further by a weakening dollar.
USD/JPY Retreats From 144 as Yen Regains Strength
– USD/JPY dropped below 144.00 as the Japanese yen begins to regain attractiveness amid lower U.S. yields.
– Support levels are seen at 142.00 and 140.50, while resistance remains strong at 145.50.
– The pair’s reversal from recent highs suggests a shift in sentiment, possibly driven by expectations that the Bank of Japan (BoJ) may inch towards policy normalization in early 2026.
– Technical indicators, including MACD and RSI, demonstrate bearish divergence on the daily chart.
Despite persistent low inflation in Japan, BoJ officials have begun signaling that conditions may soon warrant a minor rate adjustment or at least further tapering of asset purchases. Meanwhile, lower U.S. interest rates are reducing the appeal of the dollar versus the yen, fueling the recent pullback in USD/JPY.
USD/CHF Breaks Under 0.8700 Amid Franc Strength
– USD/CHF declined below 0.8700 for the second consecutive session, suggesting an increase
Read more on EUR/USD trading.