Weekly FX Technical Analysis - 9th December 2025

FX markets are showing signs of consolidation as GBP, EUR, and JPY move within familiar ranges while the dollar stabilises. GBP/USD has pushed higher through near-term resistance, EUR/GBP is easing back from multi-month highs, EUR/USD continues its gradual climb within a broader downtrend, and USD/JPY holds firm near key resistance. This week’s update highlights the critical levels and macro drivers shaping near-term momentum across the majors.

GBP/USD

GBP/USD has pushed higher this week, rising toward the 1.3330 region after rebounding firmly from support near 1.3025. The pair has now broken above shorter-term descending trendline resistance, though the broader downward structure from the July highs is still intact. Momentum has improved, with RSI climbing above 60, signalling increasing bullish pressure in the short term.

Potential Scenarios

• Bullish: A sustained break above 1.3360 opens the way toward the 1.3500 resistance cluster and the upper boundary of the broader corrective channel.

• Bearish: A move back below 1.3190 would suggest the breakout has failed, exposing 1.3020 and potentially 1.28.

Macro Backdrop to Consider

Sterling’s recovery reflects calmer global risk sentiment and a softer US dollar, although the underlying narrative remains mixed. UK data continues to show pockets of weakness, while markets still expect BoE easing to begin ahead of the Fed. With US yields stabilising and GBP short-positioning easing, the near term bias has shifted more constructively for sterling - but sustainability will depend on upcoming UK labour and GDP figures.

GBP/USD: DECEMBER ‘24 - PRESENT

EUR/GBP

EUR/GBP has eased back from the heavy 0.8850–0.8880 resistance zone after repeated rejections at the long-term rising trendline. The pair is now trading around 0.8740, having slipped below its 20-day moving average. RSI has softened to near 43, indicating a cooling of previously strong upward momentum.

Potential Scenarios

• Bullish: A renewed break above 0.8850 would reopen the path toward 0.89+.

• Bearish: A close below 0.8700 increases risk of a deeper pullback toward 0.8630 and the broader ascending support line.

Macro Backdrop to Consider

The cross continues to reflect both sterling stabilisation and euro consolidation. Eurozone data remains steady but uninspiring, while UK releases have shown tentative signs of improvement, allowing GBP to regain some ground. With neither the ECB nor BoE expected to shift policy imminently, EUR/GBP may remain range-bound unless upcoming inflation data provides a directional catalyst.

EUR/GBP: DECEMBER ‘24 - PRESENT

EUR/USD

EUR/USD continues to grind higher, now trading around 1.1650 after breaking above short-term trendline resistance. The pair remains within its broader descending channel but momentum has improved materially, with RSI pushing above 58. Price action shows constructive higher lows forming since November, though 1.17–1.1750 remains a major ceiling.

Potential Scenarios

• Bullish: A clean break above 1.1700/1.1750 would allow a move toward 1.1830 and potentially 1.19.

• Bearish: Failure to hold 1.1550 risks a return to 1.1480 and broader dollar-driven downside.

Macro Backdrop to Consider

The euro has benefited from a softer dollar following mixed US data and stabilising Treasury yields. Eurozone inflation has cooled but remained in line with expectations, reducing pressure on the ECB to move quickly on easing. With markets turning more cautious ahead of US CPI and FOMC communication, EUR/USD is likely to remain sensitive to yield differentials and shifts in Fed expectations.

EUR/USD: DECEMBER ‘24 - PRESENT

USD/JPY

USD/JPY remains elevated but shows signs of consolidation after failing to break convincingly above the 157.40–157.80 resistance band. The pair is now trading near 155.40, sitting comfortably within its established upward channel. The RSI around 55 suggests momentum has cooled but remains positive overall. Support at 153.90 has held well, reinforcing the short-term bullish structure.

Potential Scenarios

• Bullish: A renewed move above 157.40 would allow another test of 158 and potentially the psychological 160 level.

• Bearish: A drop below 153.90 opens a deeper correction toward 152.00 and the lower channel boundary.

Macro Backdrop to Consider

Yield differentials continue to favour USD strength, with no imminent policy shift expected from the BoJ. Japanese authorities remain watchful but have refrained from direct intervention as volatility stays contained. With US data softening marginally, USD/JPY may consolidate further - but upward risk persists as long as US yields remain elevated.

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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