Weekly FX Technical Analysis - 1st December 2025

FX markets continue to stabilise as the dollar eases from recent highs while sterling and the euro attempt to rebuild momentum. GBP/USD is struggling below trendline resistance, EUR/GBP holds firm despite recent pullbacks, EUR/USD edges higher within a broader downtrend, and USD/JPY consolidates after testing multi-year resistance. This week’s update breaks down the key levels, momentum signals, and macro drivers shaping near-term direction across the major pairs.

GBP/USD

GBP/USD has attempted a recovery but remains capped below the descending trendline extending from the July highs. The pair continues to trade within a broader corrective structure, having rebounded from last week’s lows near 1.30 but struggling to reclaim the 1.33 handle.

Potential Scenarios

• Bullish: A break above 1.3260 would open the way toward 1.34 and the upper boundary of the descending channel.

• Bearish: Failure to build support above 1.31 risks renewed pressure toward 1.3020 and potentially 1.28.

Macro Backdrop to Consider

Sterling’s modest rebound reflects improved risk appetite and slightly softer dollar dynamics, but UK data remains mixed and continues to limit upside momentum. With global sentiment uneven and US yields elevated, GBP/USD remains biased toward consolidation unless upcoming UK data surprises positively.

GBP/USD: AUGUST ‘24 - PRESENT

EUR/GBP

EUR/GBP continues to trade constructively, hovering around 0.8790 after bouncing from support near 0.8750. The pair has yet to challenge the heavy resistance zone at 0.8840–0.8870, where the long-term rising resistance line remains a clear technical barrier. The RSI near 53 reflects steady momentum but not the strong buying pressure seen earlier in November.

Potential Scenarios

• Bullish: A break above 0.8850/0.8870 could trigger a push into 0.89+ and retest the upper resistance trendline.

• Bearish: A close below 0.8750 would expose 0.8680 and the broader rising trendline support.

Macro Backdrop to Consider

The cross reflects ongoing GBP softness and a stabilising euro tone, though neither currency currently shows strong directional conviction. Markets remain unsure about the ECB’s long-term path, while UK data continues its pattern of underperformance. Near-term direction will depend heavily on inflation data from both economies and whether risk sentiment stays supportive of EUR outperformance.

EUR/GBP: OCTOBER ‘24 - PRESENT

EUR/USD

EUR/USD has edged back toward the 1.1620 region but remains firmly within its broader descending channel. Multiple rejections at the descending trendline around 1.1650–1.17 continue to cap upside, while support at 1.1480 has held for now. The RSI around 56 indicates improving momentum relative to recent weeks, though the structure remains corrective rather than bullish.

Potential Scenarios

• Bullish: A sustained break above 1.1650/1.1680 would open a move toward 1.1780.

• Bearish: A downside break below 1.1480 risks a continuation toward 1.13.

Macro Backdrop to Consider

Modest dollar softness has provided temporary relief, but the euro remains weighed by subdued Eurozone data and expectations that the ECB will lag the Fed in easing. US economic resilience continues to favour the dollar, keeping EUR/USD range-bound. Markets will look to upcoming inflation and PMI figures to determine whether the recent euro stabilisation can extend further.

EUR/USD: AUGUST ‘24 - PRESENT

USD/JPY

USD/JPY remains elevated after recently retesting the 157.80 region, with price now consolidating around 155.20. The pair continues to trade inside a steep upward channel, though momentum has cooled slightly as shown by the RSI easing to near 54. While still bullish, the pair is approaching an area that has repeatedly triggered corrective pullbacks.

Potential Scenarios

• Bullish: A break back above 157.20 would allow a retest of 157.80 and could extend toward 160.

• Bearish: A drop below 154.00 would expose 152.70 and potentially deeper consolidation.

Macro Backdrop to Consider

Yield differentials remain firmly in favour of the dollar, reinforcing structural yen weakness. The BoJ’s ultra-loose stance continues to contrast sharply with the Fed’s higher-for-longer positioning. While Japanese officials may grow increasingly uncomfortable with yen weakness, markets remain sceptical of near-term intervention, especially without a clear catalyst from US data.

USD/JPY: OCTOBER ‘24 - PRESENT

Current Cash Account Yields Available

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.

info@k2-fx.com

+44 203 355 4603