EUR/USD, GBP/USD, and USD/JPY Market Analysis

Today, investors are focusing on the December minutes of the US Federal Reserve meeting, which will help clarify the regulator’s plans for the near future: more than 70.0% of analysts expect that officials may resume the program to reduce borrowing costs in March. Also during the day, December data on the index of business activity in the manufacturing sector from the Institute for Supply Management (ISM) will be published: a moderate increase in the indicator is expected from 46.7 points to 47.1 points. It is worth noting that a similar index from S&P Global presented the day before did not meet analysts’ expectations, falling from 48.2 points to 47.9 points with neutral forecasts.

EUR/USD

According to EUR/USD technical analysis, the EUR/USD pair is showing slight growth, correcting after a rather sharp decline the day before, as a result of which the local lows of December 20, 2023, were updated. The single currency is trading near the 1.0960 mark, and market participants expect new drivers to appear in the market. Immediate resistance can be seen at 1.1000, a break higher could trigger a move towards 1.1047. On the downside, immediate support is seen at 1.0947, a break below could take the pair towards 1.0869.

The EU will present December inflation statistics within a week, which may affect the ECB's further monetary policy. The German consumer price index may rise by 0.1% in monthly terms after -0.4 and in annual terms from 3.2% to 3.8%. Final inflation data in the eurozone will be published on Friday. The annual rate is expected to accelerate from 2.4% to 3.0%. In addition, investors will evaluate the December report on the American labour market, which may also have an impact on future decisions of the US Federal Reserve.

Based on the lows of two days, a new downward channel has formed. Now the price is in the middle of the channel and may continue to decline after approaching the upper limit.

GBP/USD

The GBP/USD pair is trading with upward dynamics, recovering from a sharp decline at the end of yesterday's trading session and testing the 1.2640 mark for a breakout upwards in anticipation of the emergence of new drivers in the market. Immediate resistance can be seen at 1.2722, a break higher could trigger a rise towards 1.2752. On the downside, immediate support is seen at 1.2611, a break below could take the pair towards 1.2536.

The index of business activity in the UK manufacturing sector from S&P Global corrected from 46.4 points to 46.2 points. Tomorrow, November data on the dynamics of consumer lending, where a correction is expected from 1.289 billion pounds to 1.400 billion pounds, will be presented, while the number of approved mortgage applications could rise from 47.383k to 48.500k.

Based on the lows of two days, a new downward channel has formed. Now, the price is near the lower border of the channel and may continue to decline.

USD/JPY

On the USD/JPY chart, the pair shows mixed dynamics, holding near the 142.00 mark. The USD/JPY pair resumed its decline after corrective growth the day before. Strong resistance can be seen at 142.42, a break higher could trigger a rise towards 143.52. On the downside, immediate support is seen at 140.80. A break below could take the pair towards 140.00.

Trading participants are in no hurry to open new positions ahead of the publication of the December minutes of the US Federal Reserve meeting. In Japan, at the end of the week, December data on the index of business activity in the manufacturing sector from Jibun Bank, as well as on the consumer confidence index, will be published. In the US on Friday, the focus will be on December labour market statistics: the number of new jobs created by the national economy outside the agricultural sector is expected to slow from 199k to 168k, as well as an increase in the unemployment rate from 3.7% to 3.8% and a decrease in average hourly wages from 4.0% to 3.9%.

Based on the highs of two days, a new ascending channel has formed. Now, the price is in the middle of the channel and may continue to rise.