FOREX fundamental analysis for EUR/USD on January 9, 2025
In December, the US Federal Reserve System (Fed) cut the federal funds rate by 25 basis points to 4.5%, which financial markets perceived as a "hawkish" correction. This decline led to a fall in stock indices, an increase in treasury bond yields and a strengthening of the US dollar among forex currency indices. Investors expected that the minutes of the last Fed meeting would confirm the harsh rhetoric, but this did not happen. Instead, comments from FOMC member Christopher Waller and weak employment data from ADP forced sellers of the EUR/USD pair to temporarily retreat.
The Fed expressed caution, pointing out that although inflation is likely to continue to decline towards the 2% target, this process may be delayed due to possible changes in trade and immigration policies. Officials noted that the existing rates are already having less of a deterrent effect on the economy, which requires a cautious approach to further changes.
In this regard, the Fed is not yet sure that the autumn acceleration of inflation is not a sign of hidden price pressures, and that Donald Trump's policy will not strengthen inflation expectations. As a result, the regulator preferred to put the monetary policy easing process on pause. Futures markets assume that the next rate cut will take place no earlier than May. This contributes to the growth of treasury yields, which puts pressure on the stock market and leads to a decrease in the EUR/USD exchange rate.
Nevertheless, it is too early to talk about the end of the rate reduction cycle. Christopher Waller believes that inflation will continue to move towards the target level, and further reduction in borrowing costs may be justified. Weak private sector employment data from ADP, where the increase was only 122 thousand jobs instead of the expected 140 thousand, added uncertainty for euro sellers.
Futures markets now estimate the probability of the Fed rate remaining at 4.5% in January at 95%, in March at 59%, and in May at 45%. These estimates are lower than those that were before the publication of data from ADP and the minutes of the December Fed meeting. The dynamics of these expectations continue to have an impact on the US dollar, and further changes depend on the upcoming US employment data for December.
Bloomberg experts predict an increase in employment by 162,000 jobs and a continuation of the unemployment rate at 4.2%. Strong data can increase pressure on the EUR/USD exchange rate, while weak data can open the door for correction. At a time when the European Central Bank (ECB) is striving to reach a neutral rate level of 2% as soon as possible, which is confirmed by the statements of the head of the Bank of France Francois Villaroy de Galo, euro shorts formed from the level of $1.0375 remain relevant. We are waiting for data on the US labor market.
EUR/USD technical analysis
Yesterday, the EUR/USD correction continued. As a result, the pair reached the support area 1.0298 - 1.0285, which the buyers were able to hold. Today, we will look for entry into long positions near this zone with the first target at 1.0361 and the second at 1.0436.
To change the trend direction, sellers will need to break through the 1.0298 - 1.0285 area downwards. In this case, from the next trading day, it will be possible to consider selling EUR/USD with the main target at the lower Target zone of 1.0160 - 1.0133.
USD/JPY analysis on January 9th, 2025The USD/JPY pair is moving in a sideways flat near the 157.80 mark, maintaining the potential for strengthening the US dollar.According to recent statistical reports, the average salary in Japan increased by 3.0% year-on-year, exceeding analysts' expectations of 2.7%. The total income of employees increased from 2.2% to 3.0%, and overtime pay increased from 0.7% to 1.6%. These data indicate successful negotiations between trade unions and companies, which allows the Bank of Japan to adhere to a "hawkish" monetary policy. There are also positive changes in the capital market. The volume of purchases of foreign bonds decreased to 228.6 billion yen, while investments in Japanese stocks rose to 562.7 billion yen after outflows of 1.023 trillion yen. However, the consumer confidence index dropped from 36.4 to 36.2 points, which is lower than the expected 36.6 points. This casts doubt on the Bank of Japan's forecasts for the recovery of consumer spending and its impact on the economy. This factor may influence the regulator's decision on interest rate changes at the next meeting.The US dollar index continues to strengthen. At the moment, it reached 108.8. The dollar was supported by strong labor market data from ADP. The number of initial applications for unemployment benefits decreased from 211,000 to 201,000, and the total volume of applications decreased to 1,867 million, which is lower than the projected 1,870 million. The minutes of the Fed's December meeting showed that the regulator is ready to take a pause in tightening monetary policy due to concerns that inflation will not reach the target level of 2.0% without maintaining current restrictions. The Fed plans two rate cuts in 2025 instead of the previously announced four.USD/JPY technical analysis for todayOn the daily chart, the pair is correcting within the framework of a local uptrend with the boundaries of 163.00–155.00. Technical indicators confirm the buy signal, but it weakens due to the correction of the asset. The fast EMAs on the alligator indicator are located at a distance from the signal line, and the Awesome Oscillator (AO) histogram forms new correction bars in the buy zone.Trading recommendations- long positions when the price is fixed above the level of 158.70 with a target of 161.70. We will place the stop loss at 157.40.- Sales will be advisable if the price is fixed below the level of 156.90 with a target of 153.30. Stop loss — 158.00. 
GBP/USD analysis on January 9th, 2025In Asian trading on January 9, GBP/USD continues to decline, developing the "bearish" momentum of last week, approaching the level of 1.2330 with the prospect of a breakdown down. Market participants are preparing for the inauguration of Donald Trump, scheduled for January 20, which is putting pressure on the British currency.Measures are expected from the new US administration to impose additional duties on imports of goods from China, Canada and Mexico. This could disrupt global supply chains. In this regard, it is assumed that the US Federal Reserve may tighten monetary policy, which will strengthen the dollar. At the same time, other global regulators such as the ECB and the Bank of England may also review monetary strategies. Recall that in December, the Fed lowered the interest rate by 25 basis points to 4.50%, indicating that only two rate changes are expected in 2025 instead of the previously estimated four. The Bank of England, in turn, is considering a 0.59% rate adjustment, but the final decisions may be reviewed.US labor market data for December is expected to be published tomorrow. Analysts predict a reduction in the number of new jobs in the non-agricultural sector to 154 thousand, compared with 227 thousand in November. The average hourly wage may drop to 0.3% in monthly terms, while unemployment remains at 4.2%.Investors in the UK are following the retail price statistics provided by the British Retail Consortium of (BRC). In December, the index decreased by 1.0%, which turned out to be worse than expected. This may indicate a weakening of price pressure, but the Bank of England is not yet ready to accelerate policy easing and is making cautious statements about combating inflation.KPMG experts predict an acceleration of UK economic growth in 2025 due to current monetary policy and increased government spending. GDP is expected to grow by 1.7% and consumer spending is expected to increase by 1.8%. Inflation is projected to rise at 2.4% in 2025 and 2026, which is only slightly below the level of 2024.Technical analysis of GBP/USD for todayOn the daily chart, the Bollinger indicator is expanding, signaling a continuation of the downtrend, although the dynamics may slow down. The MACD keeps the sell signal below the signal line. Stochastic is also showing a downward movement, although it is holding near the "20" level, which indicates the risk of oversold pound in the short term.Trading recommendations- short positions at the breakdown of the 1.2300 level with a target of 1.2200. We will set the stop loss at 1.2350.- purchases when the pair rebounds from the level of 1.2300 and breaks 1.2350 upwards with a target of 1.2450. We will place the stop loss at the level of 1.2300. 
The Australian dollar is showing a moderate decline. AUD/USD is developing a "bearish" momentum that originated at the beginning of the week after a pullback from local highs in mid-December. Pressure on the Australian currency remains as the US dollar strengthens amid expectations of a tight monetary policy by the Federal Reserve following statements by newly elected US President Donald Trump. The markets expect that the new trade and foreign policy initiatives of the republican administration, including the indexation of import duties, may affect the long-term prospects for the dynamics of world currencies.Statistics from Australia show mixed signals. Retail sales increased by 0.8% in November, which was lower than the forecast 1.0%, but better than the previous month's 0.5%. Exports increased by 4.8%, while imports increased by 1.7%, which contributed to an increase in the trade surplus to 7,079 billion Australian dollars against the forecast of 5,750 billion. The consumer price index also showed an increase to 2.3%, which exceeded expectations, but the truncated figure fell to 3.2%, remaining close to the target range of the Reserve Bank of Australia (RBA). The level of rents and the stability of the labor market continue to be key factors for the monetary policy of the RBA, which is likely to take a wait-and-see attitude towards interest rate adjustments.Meanwhile, data from China indicates a slowdown in the growth of the consumer price index of China, which also affects the Australian dollar. In December, the consumer price index decreased to 0.1% year-on-year, while the producer price index showed a slowdown from -2.5% to -2.3%.Investors are waiting for the publication of key statistics on the US labor market for December on Friday, which may have a significant impact on the movement of the AUD/USD pair. 154 thousand new jobs are projected to be created outside the agricultural sector, and unemployment is likely to remain at 4.2%. Data from ADP also points to a slowdown in employment growth.AUD/USD technical analysis for todayTechnical analysis shows that on the daily chart, the Bollinger Band indicator suggests a move to the horizontal direction, limiting the "bearish" prospects in the short term. The MACD gives a weak buy signal, while the Stochastic is near the "20" mark, which indicates a possible oversold position.Trading recommendations- The formation of short positions is recommended when the pair breaks down the level of 0.6178 with a target of 0.6100. We will place the stop loss at 0.6225.- Purchases are advisable when there is a rebound from the 0.6178 level and an upward breakout of 0.6225. The target will be 0.6300. We put the stop loss at 0.6178. 
Against the background of the strengthening of the US currency, the USD/CAD pair gained a foothold around 1.4349 in the Asian session on Wednesday.One of the key factors of stabilization is the report of Statistics Canada on International Trade. In November, exports increased by 2.2% after a previous increase of 1.7%, while imports increased by 1.8% compared with 0.3% previously. This is the second month in a row with positive dynamics, which contributed to the reduction of the trade deficit from $544 million to $323 million. However, exports of services decreased by 0.2% to $18.2 billion, while imports decreased by 0.1% to $18.5 billion. There was also an increase in the Ivey composite Business Activity Index (PMI) to 54.7 points from 52.3 points, indicating an improvement in economic activity.Nevertheless, investors' attention is focused on the internal political crisis. Canadian Prime Minister Justin Trudeau has announced his intention to resign after choosing a new leader of the Liberal Party.Donald Trump, commenting on this event, expressed the opinion that American citizens will no longer tolerate the huge trade deficits and subsidies supporting the Canadian economy. Ironically, he suggested that Canada's incorporation into the United States would provide the country with stability and protection from external threats. He had previously expressed his opinion about possible accession if his 25% duties on Canadian goods lead to an economic crisis.The US dollar index is holding at 108.4. The main driver of the strengthening is the growth in the number of vacancies in the labor market to 8.098 million, which is the highest since July last year. The ISM index of business activity in the service sector also rose from 52.1 to 54.1 points, confirming the stability of the US economy.On the daily chart, the USD/CAD pair is trading within an ascending channel with dynamic boundaries of 1.4550–1.4300. Technical indicators retain the buy signal, although they have weakened it somewhat due to a local correction. The range of fluctuations of the EMA on the alligator indicator is expanding, and the moving averages are diverging, while the Awesome Oscillator (AO) indicator is forming new correction bars above the zero line.USD/CAD trading recommendationsTo form long positions, it is recommended to wait for the price to consolidate above the level of 1.4400 with a target of 1.4550. The stop loss should be set at 1.4340.It is advisable to open sales after consolidating the pair below 1.4300 with a target of 1.4150 and a stop loss at 1.4360. 
FOREX fundamental analysis for EUR/USD on January 8, 2025Speculation around Donald Trump's tariff policy pushed EUR/USD to a short—term jump, reminiscent of the so-called "dead cat jump" - a technical figure characterized by a sharp but temporary increase against the trend. However, such movements quickly lose momentum, and quotes return to previous levels. Just as the world awaits the inauguration of the Republican, the currency markets are eagerly awaiting the test of parity between the euro and the dollar. According to experts from Bank of New York Mellon and Mizuho, this could happen as early as January.Since the beginning of the year, the EUR/USD currency pair has been showing volatility, which portends difficult times for traders. Despite confidence in the strength of the US dollar, any doubts lead to a rapid reduction in long positions on the greenback, which contributes to the growth of EUR/USD. Forex hedging demonstrates the growth of dollar net longs to the maximum of January 2019, which makes them extremely vulnerable to any market shocks.Sharp fluctuations in the EUR/USD exchange rate are likely to become a permanent feature of the current year. Investors will have to adapt to the unpredictable market reactions to the statements and actions of the US president. Just as oil reacted to any signals from Saudi Arabia at the beginning of the 21st century, the dollar will react to every step of the Trump administration.However, without a deterioration in macroeconomic indicators in the United States and an improvement in the situation in the Eurozone, it is difficult to expect a reversal of the downward trend in EUR/USD. European inflation, which rose to 2.4% in December, gives some hope, but strong indicators on the labor market and the service sector in the United States confirm the stability of the American economy. The probability of achieving parity between the euro and the dollar in the first quarter is 40%.Positive economic data from the United States boosted treasury yields and led to a drop in stock indexes. The futures market has increased the likelihood that the Fed will not cut rates in 2025 from 12% to 17%. However, the final clarity can only be provided by the US employment report for December. This report will help assess how long the Fed's pause in the current monetary easing cycle will be. In the meantime, the inability of the EUR/USD bulls to overcome the 1.0375 pivot level is a signal for the formation of short positions.EUR/USD technical analysisOn Wednesday, EUR/USD is trading in a corrective decline towards a short-term uptrend. The pair is currently testing the support area (A) 1.0344 - 1.0335. From here, we can consider entering long positions with the first target at 1.0386 and the second at 1.0436.If the support area (A) is broken down, the correction will continue to the support area (B) 1.0298 - 1.0285. Support (B) is the boundary of the trend. Purchases can also be viewed from this zone. 
On Tuesday, GBP/USD is strengthening against the background of the weakening of the US dollar and is currently trading around 1.2533.Recently, S&P Global presented December data on business activity in leading economies. Although the results are still below expectations, the very fact of recovery is a positive signal. In the UK, the index of business activity in the services sector rose from 50.8 to 51.1 points, which contributed to an increase in the composite indicator from 50.5 to 50.4 points. Even despite possible tax increases by the Labor government, British companies are preparing to raise prices for their goods and services, as well as reduce investments to mitigate financial losses. The pound was positively influenced by retail sales data from the British Retail Consortium (BRC), where the volume increased from -3.4% to 3.1%, which is the most significant jump since March 2024.The US dollar index, in turn, showed a noticeable decline and is now trading at 108.1. Analysts' expectations for an improvement in business activity in key sectors of the US economy have not been met: The index of business activity in the services sector, according to S&P Global, rose from 56.1 to 56.8 points, which is significantly lower than the forecast of 58.5 points. The composite indicator, which takes into account data from both the service sector and the manufacturing sector, adjusted from 54.9 to 55.4 points, which is also lower than expected at 56.6 points. These data indicate that the current growth rate of the American economy is insufficient for a sustained recovery. This may prompt the US Federal Reserve to reconsider plans to further tighten monetary policy, which is confirmed by the FedWatch indicator from the Chicago Mercantile Exchange (CME Group), according to which the probability of maintaining the current rate has increased from 88.6% to 92.5%.Technical analysis for GBP/USD for todayOn the daily chart, the GBP/USD pair is below the resistance line of the descending channel with the boundaries of 1.2550–1.2200.Technical indicators continue to give a sell signal: the fast EMAs on the alligator indicator diverge from the signal line, and the Awesome Oscillator (AO) histogram forms new descending bars in the sell zone.Trading recommendationsIt is recommended to open short positions after the price has consolidated below the support level of 1.2460 with a target of 1.2300. We will place the stop loss at 1.2520.Purchases when the price is fixed above the resistance level of 1.2580 with a target at 1.2770. In this case, we will set the stop loss at 1.2500. 
FOREX fundamental analysis for EUR/USD on January 7, 2025If you want to understand the president's plans, you need to ask him himself. However, the market reacted more emotionally than it should to a Washington Post report that Donald Trump's team is considering introducing universal tariffs on critical imports for all countries. This is due to the oversaturation of the market with dollar longs, which grew at a record pace in the fourth quarter.Against the background of this news, the EUR/USD pair jumped by 1%, US bond yields declined, and stock indexes went up. Investors concluded that Donald Trump is more concerned about inflation and the state of the economy than he is talking about it. Bloomberg research shows that if duties of 60% on Chinese imports and 10-20% on imports from other countries are imposed, the US GDP could shrink by 0.8% by 2028 in the event of retaliatory measures from Beijing and by 1.3% in the event of a global trade war.If tariffs affect only critical imports, and not all of them, the slowdown in the global economy will not be fatal. This will have a positive impact on the pro-cyclical euro currency. The decline in US bond yields is due to the fact that derivatives have taken into account the possibility of an expansion of the Fed's monetary expansion. Without accelerating inflation, the Central Bank may continue to cut rates.However, it is not known what exactly will happen after Trump's return to the White House. He claims that the Washington Post relies on anonymous sources that do not exist. Trump denies allegations of tariff cuts.Initially, the new president promised to increase duties on imports from China to 60%, then mentioned 10-20% tariffs for other countries. After winning the election, he talked about 10% for China and 25% for Canada and Mexico. He plans to use the revenue from the duties to fund tax cuts, but will he be able to get Congressional support? It is also possible that lawsuits will be filed against the tariffs again, as was the case in his first term.The markets froze in anticipation. Despite the pullback of EUR/USD after the initial jump, the reaction to the leak from the Washington Post may indicate a possible direction of movement. If tariffs are targeted, as Goldman Sachs suggests, this will support the euro. At the same time, Citigroup believes that Trump's threats are louder than their real incarnation, and in the near future this will bring investors back to the US dollar. If you focus on trading from forex levels, then the signal for sales will be a drop in the euro below $1.0375.EUR/USD technical analysisYesterday, EUR/USD broke through the key resistance of the short-term downtrend of 1.0376 - 1.0362. Thus, the trend has changed to an upward one. The upper target zone of 1.0527 - 1.0500 is now the growth target.We will consider purchases of the instrument from strong support levels, which are: the area (A) 1.0344 - 1.0335 and the area (B) 1.0298 - 1.0285. The main target of buyers will be yesterday's maximum. If yesterday's maximum is updated, then the support areas will need to be rebuilt. 
USD/CHF analysis on January 6, 2025During the Asian session, the USD/CHF pair is trading in a correction near the 0.9091 mark. The Swiss franc started the year with a slight decline against the US dollar.On Friday, the portal procure.ch He published a report on the Swiss business activity index for December, where the indicator fell to 48.4 points from the previous 48.5. However, this had little effect on market dynamics, as investors' main attention is focused on the upcoming inflation statistics, which will be published tomorrow. Experts predict a decrease in the consumer price index by 0.1% in December, which may lead to a slowdown in the annual inflation rate below 0.7%. If the forecasts are confirmed, this will be an important signal for the Swiss National Bank regarding possible changes in monetary policy. The probability of a return to negative rates this year is low, but a reduction in rates to a range of 0.25–0.00% is possible.Despite the recent strengthening of the US dollar index to 108.6, the dynamics of USD/CHF remains stable. The prospects for updating the annual highs for the dollar index this week remain. An additional growth factor may be the ISM Manufacturing Business activity index report, which showed an improvement from 48.4 to 49.3 points in December. If a similar indicator for the service sector, which will be published today, meets expectations and rises from 56.1 to 58.5 points, this may strengthen the position of the US currency.On the daily chart, the pair is approaching the resistance line of the ascending channel with dynamic boundaries of 0.9230–0.8940. Technical indicators signal continued growth: the fast EMAs on the alligator indicator are moving away from the signal line, and the awesome oscillator (AO) histogram is forming new ascending bars in the buy zone.To form long positions, it is recommended to wait for the price to consolidate above the resistance level of 0.9120 with a target of 0.9220. We will set the stop loss at 0.9050.We will consider sales when the 0.9060 support level breaks with a target of 0.8940 and a stop loss at 0.9120.