On Thursday (December 26th) during the European market session, trading volume in financial markets generally decreased and price fluctuations were limited during the Christmas holiday period. The US dollar index is currently around 108.15, supported by US bond yields approaching 4.6% and reduced expectations of a Fed rate cut in 2025. This performance demonstrates the market's confidence in the US economy, with the US dollar approaching its two-year high.

The latest released US economic data shows a complex performance. Durable goods orders in November decreased by 1.1% month on month, indicating a possible slowdown in manufacturing activity. Meanwhile, the consumer confidence index for December decreased from 111.7 last month to 104.7, reflecting a decline in consumer confidence. However, these indicators have limited impact on the US dollar (the current holiday trading environment is relatively calm). Market participants expect that as the holiday continues, trading volume will remain sluggish and the volatility of the US dollar price may be limited.

In terms of technology, analyst Ali provided the following interpretation:

Technical analysis of the US dollar index

The US dollar index maintains a bullish trend within the upward channel. 107.93 is the key support level, and if it breaks through the resistance level of 108.54, the index is expected to further rise to 108.90, continuing the strong performance of the US dollar.

From a technical perspective, the 50 day moving average is at 107.98, providing a guarantee for short-term support; The 200 day moving average is at 107.18, forming a broader support range. If the US dollar index cannot remain above 107.93, it may trigger a significant pullback, with initial support at 107.60 and a further downward target of 107.18.

GBP/USD Technical Analysis

The pound/dollar is currently trading at 1.25310, oscillating near the key pivot point of 1.25739. The short-term resistance is at 1.26400, and breaking through this level may push the exchange rate further upward, with a target level of 1.27276. The initial support level below is 1.24761, and the deeper support level is 1.23883.

From a technical perspective, the 50 day moving average is at 1.25618, which is consistent with the current pivot point position and provides support for short-term stability; The 200 day moving average is at 1.26411, further strengthening the bearish sentiment in the market. We need to closely monitor the level of 1.25739. If we can continue to break through this point, we may turn bullish; On the contrary, it may continue the downward trend.

EUR/USD Technical Analysis

The euro/dollar is currently trading at 1.03990, hovering around the pivot point of 1.04156. Despite a slight increase in the exchange rate, market sentiment remains cautious, with short-term resistance at 1.04699. If this level is broken, it may push the euro/dollar up to 1.05471, indicating a possible change in market sentiment.

From the perspective of downside risk, the initial support level is 1.03467, and if it falls below this level, it may further drop to 1.02904.

On a technical level, the 50 day moving average is at 1.04111, which is consistent with the current price and provides short-term support; The 200 day moving average is at 1.04753, indicating that the market is still facing bearish pressure. Attention should be paid to the performance of the 1.04156 pivot point. If it can effectively break through this level, it may drive the exchange rate to rise; If this point cannot be held, there may be a risk of further decline.

summary

During the Christmas holiday, due to a decrease in trading volume, the US dollar, pound/dollar, and euro/dollar all showed limited volatility. The US dollar index remains strong under the support of US bond yields, but faces a critical technical level test. Both the pound and the euro are hovering around key pivot points, and it is necessary to pay attention to the breakthrough of relevant technical levels to determine the future direction. As the holiday season draws to a close, the market may experience more volatility in the coming weeks.