ECB’s Dovish Stance Weighs on Euro – Analysis for EUR/USD, EUR/JPY, EUR/GBP

Market Overview

EUR/USD remains range-bound as the US Dollar strengthens amid light holiday trading. The US Dollar Index holds above 108.00, supported by the Federal Reserve’s guidance for only two rate cuts in 2025.

The dollar has been bolstered by this shift in expectations. Meanwhile, the Euro faces pressure due to dovish European Central Bank (ECB) expectations.

ECB President Lagarde’s comments on inflation staying above target and the possibility of rate cuts have weighed on the euro. With the Christmas holiday and low market volume, traders may see a muted market reaction as liquidity remains thin in the coming days.

EUR/USD – Technical Analysis

The EUR/USD is trading at $1.03912, showing a slight decline of 0.13%. The key pivot point at $1.04465 will be pivotal for determining the next price direction. If the pair breaks above this level, it could test immediate resistance at $1.05227, with further upside potential toward $1.05932.

On the downside, immediate support is at $1.03426, with further support at $1.02760.

The 50-day EMA at $1.04121 is just below the pivot, suggesting some bearish pressure, but if EUR/USD can break above $1.04465, it could shift to a more bullish bias. Traders should watch these levels closely for price movement signals.

EUR/GBP – Technical Analysis

The EUR/GBP is trading at 0.82944, showing a slight decline of 0.09%. The key pivot point at 0.8312 will be crucial for determining the next move. If the pair can break above this level, it may test resistance at 0.8345, with further potential to reach 0.8373.

On the downside, support is at 0.8270, with additional support at 0.8225. The 50-day and 200-day EMAs are both around 0.8288 and 0.8287, indicating a relatively neutral market.

If EUR/GBP breaks above 0.8312, it could shift to a more bullish outlook, but failing to hold above support could lead to further downside movement.

EUR/JPY – Technical Analysis

EUR/JPY is trading at 163.31, showing a small decline of 0.14%. The pivot point at 163.80 will be critical for direction. If the pair breaks above this level, it could test immediate resistance at 164.99, with further upside potential toward 166.02.

On the downside, support is at 162.27, with a stronger level at 161.34. The 50-day EMA at 162.86 and the 200-day EMA at 161.47 indicate a generally bullish outlook if prices hold above the pivot.

A break below 163.80 could trigger a sharp selling trend, while a breakout could lead to further gains.