Published: 26 December 2025,06:46
Daily Market Analysis New
Key Takeaways:
*Dollar remains under pressure amid Fed rate-cut expectations and subdued U.S. economic data.
*Euro consolidates near three-month highs as ECB maintains rates and signals potential future tightening.
Market Summary:
With market liquidity thin ahead of the Christmas holidays and limited catalysts globally, the U.S. dollar has remained under pressure in recent days. Investors continue to digest expectations of additional Federal Reserve rate cuts, with economists now projecting the FOMC may implement two more 25-basis-point reductions in 2026.
U.S. inflation data has eased, while softer-than-expected jobs reports have further reinforced expectations for looser monetary policy. At the same time, trade tensions and political developments continue to weigh on the dollar. Earlier in the year, chaotic U.S. tariffs under President Donald Trump triggered a crisis of confidence, and growing influence over the Fed has raised concerns about the central bank’s independence. Compared with other major G10 central banks remaining on hold, a dovish Fed bias and ongoing liquidity operations leave the USD outlook tilted to the downside.
Meanwhile, the euro has edged higher to a three-month peak, consolidating in a narrow range. The European Central Bank kept interest rates unchanged, contrasting with the Fed’s dovish stance. Additionally, the ECB revised some of its growth and inflation projections upward, signaling the possibility of future tightening in the monetary policy cycle.
Technical Analysis
EUR/USD, H4:
EUR/USD is trading higher, approaching the crucial resistance level at 1.1800. Market participants are closely watching for a potential breakout, which could pave the way for further gains toward the next resistance at 1.1870.
However, technical indicators show signs of caution. MACD reflects diminishing bullish momentum, while the RSI stands at 59, signaling the possibility of a short-term pullback. Should a technical correction occur, the pair could retrace toward support at 1.1715.
Additionally, EUR/USD has been forming a bearish divergence, suggesting that failure to break above the 1.1800 resistance could shift the pair toward a more bearish bias. Traders should monitor price action around this key level to gauge whether bullish momentum will persist or give way to a retracement.
Resistance Levels: 1.1800, 1.1870
Support Levels: 1.1715, 1.1625
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