Weekly FX Technical Analysis - 15th December 2025

FX markets are showing signs of consolidation as sterling and the euro extend recent recoveries while the dollar eases modestly. GBP/USD is testing key resistance after reclaiming the 1.33 area, EUR/GBP remains range-bound below multi-month highs, EUR/USD is pressing toward the top of its descending channel, and USD/JPY consolidates after failing to break higher. This week’s update highlights the technical levels and macro drivers shaping near-term direction across the major pairs.

GBP/USD

GBP/USD has extended its recovery, pushing up toward the 1.3380 region after reclaiming the 1.33 handle. Price has now moved back above the short-term moving averages and is testing the underside of longer-term descending resistance from the July highs. Momentum continues to improve, with RSI rising into the low 60s, suggesting increasing bullish pressure but with key resistance still overhead.

Potential Scenarios

• Bullish: A sustained break above 1.3400 would open the door toward 1.3600 and the upper boundary of the broader corrective structure.

• Bearish: Failure to hold above 1.3260 risks a pullback toward 1.3190 and potentially 1.30.

Macro Backdrop to Consider

Sterling continues to benefit from a softer dollar environment and improved global risk sentiment. While UK data remains mixed, expectations around BoE easing have stabilised, allowing GBP to recover ground against the dollar. Near-term direction will hinge on upcoming UK labour data and whether US yields remain contained.

GBP/USD: DECEMBER ‘24 - PRESENT

EUR/GBP

EUR/GBP remains supported but is struggling to extend gains beyond the 0.88 area, with price currently rotating around 0.8775. The pair continues to trade within its rising channel, though momentum has flattened, as reflected by RSI holding close to neutral near 50. The 0.8850–0.8880 zone remains a key technical ceiling.

Potential Scenarios

• Bullish: A clear break above 0.8850 would re-open the path toward 0.89 and the upper channel boundary.

• Bearish: A close below 0.8715 would expose 0.8650 and rising trendline support.

Macro Backdrop to Consider

The cross reflects a balance between modest euro resilience and a recovering pound. Eurozone data has remained steady but uninspiring, while UK releases have marginally improved. With neither the ECB nor BoE signalling imminent policy shifts, EUR/GBP is likely to remain range-bound unless inflation data forces a repricing.

EUR/GBP: DECEMBER ‘24 - PRESENT

EUR/USD

EUR/USD has pushed higher toward 1.1740, approaching the upper boundary of its broader descending channel. The pair remains supported by higher lows since November, and momentum has strengthened, with RSI climbing toward the upper 60s. However, the 1.18 region continues to act as a major technical barrier.

Potential Scenarios

• Bullish: A decisive break above 1.1800 would target 1.19 and potentially 1.20.

• Bearish: Failure to sustain gains above 1.1650 risks a pullback toward 1.1550 and 1.1480.

Macro Backdrop to Consider

The euro is benefitting from softer US data and easing Treasury yields, reducing near-term dollar support. Eurozone inflation has remained contained, keeping ECB policy expectations stable. EUR/USD remains sensitive to upcoming US data releases and Fed communication, particularly around the timing of future rate cuts.

EUR/USD: DECEMBER ‘24 - PRESENT

USD/JPY

USD/JPY has slipped back toward 155.10 after failing to sustain a move above the 157.00–157.50 resistance zone. Despite the pullback, the broader uptrend remains intact, with price holding comfortably above rising channel support. RSI has eased toward 50, indicating cooling momentum but no clear trend reversal.

Potential Scenarios

• Bullish: A renewed break above 157.50 would allow another test of 158 and potentially the psychological 160 level.

• Bearish: A break below 153.90 would signal a deeper correction toward 152.00.

Macro Backdrop to Consider

Yield differentials continue to favour USD strength, although recent consolidation reflects a temporary pause in dollar momentum. The BoJ remains firmly accommodative, limiting yen upside, while Japanese authorities continue to monitor FX moves. Unless US yields fall materially, USD/JPY is likely to remain supported on dips.

USD/JPY: DECEMBER ‘24 - PRESENT

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As always, if you’d like to discuss these moves in more detail, or how they could impact your business or personal requirements, please don’t hesitate to get in touch.

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Disclaimer: The information in this publication is provided for general information purposes only. It does not constitute financial or investment advice, nor should it be relied upon as such. Readers should consider their own circumstances and seek independent advice where appropriate.