**Forex Major Pairs Technical Analysis – January 5, 2026**
*Based on analysis from FXDailyReport.com (original author: Minta P) and supplemented with additional research.*
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The forex market continues to display considerable movement as 2026 opens, driven by changes in monetary policy expectations, economic indicators, and evolving global risk sentiment. In this in-depth analysis, we review the technical outlook and key levels to watch for the major currency pairs, integrating insights from the FXDailyReport.com article as well as additional commentary on current market conditions.
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## EUR/USD Technical Analysis
**Current Context**
After ending 2025 with heightened volatility, the EUR/USD has entered a consolidating phase. The pair remains sensitive to policy signals from both the European Central Bank (ECB) and the US Federal Reserve, as well as ongoing developments in Eurozone inflation and US labor data.
**Recent Price Action**
– EUR/USD experienced a setback after failing to sustain momentum above 1.1100 late in 2025.
– The pair has retraced towards support near 1.0880 as traders assess the likelihood of ECB rate hikes versus potential Fed cuts.
**Technical Outlook**
– The currency is currently trading just above the 200-day moving average, suggesting an ongoing battle between bullish and bearish forces.
– A confirmed break below 1.0880 could expose 1.0800 as the next area of support.
– On the upside, breaching resistance at 1.1000 may open a path toward retesting the 1.1100-1.1120 region.
**Key Technical Levels**
– Support: 1.0880, 1.0800, 1.0730
– Resistance: 1.1000, 1.1100, 1.1180
**Trading Strategy**
– Short-term traders may look for bearish opportunities if 1.0880 support fails, targeting a move toward 1.0800.
– Bulls will need to clear 1.1000 and establish a close above 1.1100 to regain control.
**Supplementary Insights**
– The ECB is projected to maintain a cautious rate path, with inflation readings in the coming weeks likely to affect the outlook.
– US economic releases, especially payroll and inflation data, will be instrumental in shaping the pair’s direction.
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## GBP/USD Technical Analysis
**Current Context**
The British pound opened 2026 looking to recover from late-2025 losses amid persistent uncertainty around the Bank of England’s (BoE) policy stance.
**Recent Price Action**
– GBP/USD has rebounded from the December lows near 1.2600, climbing back above the 1.2700 pivot level.
– The pair is oscillating within a medium-term range, consolidating after failing to break higher above 1.2800.
**Technical Outlook**
– The 50-day MA is providing near-term support around 1.2650
Read more on AUD/USD trading.