Merry Christmas and a Technical Analysis.

USD Update: The U.S. dollar, tracked by the DXY index, dipped nearly 0.65% to 101.75, marking its lowest point since late July. Thin liquidity before the Christmas holidays might amplify fluctuations, leading to losses for the American currency. The recent pullback is attributed to the Federal Reserve’s shift, signaling potential rate cuts in 2024. The dovish stance surprised investors, causing a significant drop in Treasury rates, notably the 2-year note falling below 4.40%.

GBP Analysis:

The GBP/USD pair faces resistance below the psychological 1.2700 mark. Trading at 1.2682, down 0.04%, it maintains a positive outlook with support from the 100-hour Exponential Moving Averages and a bullish Relative Strength Index (RSI) above 50. Immediate resistance lies near 1.2740, followed by 1.2761 and a key barrier in the 1.2790–1.2800 region. Critical support is at the confluence of the 100-hour EMA and a low of December 20 at 1.2625.

EUR Analysis: The EUR/USD hovers near 1.1000, potentially marking its highest daily close since early August. A breakout above this psychological level could signal further gains. Daily chart indicators favor an upside move, but caution is advised given current market conditions. On the 4-hour chart, technical indicators are less bullish, with the RSI flat and the MACD providing uncertain signals. Staying above 1.0950 suggests a favorable outlook for a break of 1.1000, while a slide below may weaken the Euro in the short term, exposing the next support at 1.0910.

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.

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