Daily Technical Analysis December 22th 2023

1. EUR/USD Analysis: 

News Summary: 

The European Central Bank may not cut interest rate in the first half of 2024, and policymakers need to watch wage development before concluding that inflation has improved permanently. November inflation data was good news, especially the core inflation rate, which fell from 4.2% to 3.6%, stronger than expected decline. However, the ECB is confident that a return to 2% inflation in 2025 is a credible prospect, but mid-term risks remain high.  

Trend Analysis: 

We can see EUR/USD rebounded again after oscillating at high and now is running above 48 hours moving average. At the same time, the MACD double line and energy bar expanded above zero axis. The sell limit can be placed when price forming top divergence, stop loss is necessary.  

Today's Key Price Levels: 

Key Support Levels: [1.0900] 

Key Resistance Levels: [1.1080] 

Pivot Points [1.1050] 

2. USD/JPY Analysis:  

News Summary: 

cabinet said it had slightly raised its economic growth forecast for the current fiscal year as external demand may offset weak domestic consumption. Real economic growth in the 2023/24 fiscal year is expected to be 1.6%, higher than the 1.3% expected half a year ago, as external demand contributed 1.4% to overall growth due to the recovery of inbound tourism and automobile production. The government's forecast is more optimistic than that of private sector economists, who expect Japan to grow 1.5% this fiscal year and 0.9% next fiscal year.  

Trend Analysis: 

We can see USD/JPY fluctuated and rebounded below 48 hours moving average. In addition, MACD double line and histogram bar began to shrink near zero axis. The yen is expected to perform well relative to other major currencies next year as it is structurally undervalued, although the arbitrage costs of being long the yen make institutions more cautious. The buy limit could be employed based on oversold structure, stop loss is compulsory.   

Today's Key Price Levels: 

Key Support Levels: [141.00] 

Key Resistance Levels: [143.70]

Pivot Points [142.00]