The EUR/USD pair remains under pressure as diverging economic performance and monetary policy between the Eurozone and the United States weigh heavily on the euro. While the HCOB Eurozone Services PMI showed a slight improvement to 51.4, the manufacturing sector remains deeply in contraction at 45.2, signaling a fragile economic outlook. Additionally, ECB policymakers maintain a cautious stance, with hints of further rate cuts in 2025, contrasting sharply with the US Federal Reserve, which remains wary of easing policy aggressively due to persistent inflation. Strong US economic data, including the rise in Composite PMI to 55.6, along with higher US Treasury yields approaching 4.4%, reinforces the dollar’s strength. This divergence favors the US dollar, keeping EUR/USD near its key support at 1.0450, with risks skewed toward further downside and a possible test of parity in 2025.

The USD/CAD pair is likely to remain elevated as strong US economic data and rising Treasury yields continue to support the US dollar. The S&P Global Composite PMI rose to 55.6, highlighting robust economic activity in the US, while the Producer Price Index (PPI) increased 0.4%, reinforcing inflation persistence. This keeps the Federal Reserve cautious about rate cuts, supporting the dollar’s bullish momentum. In contrast, while Canada’s housing starts provided a positive surprise, broader concerns about slower economic growth and sluggish retail sales weigh on CAD. Oil prices remain stable but have not provided significant upside for the Canadian dollar amid global uncertainty. With the US economy showing clear resilience, USD/CAD is likely to remain bullish, testing resistance near 1.37 and possibly extending higher.

The AUD/NZD pair is expected to remain under pressure as both currencies face significant headwinds, but the New Zealand dollar’s relative weakness gives AUD a slight advantage. The NZD continues to struggle due to weak domestic data, with the BusinessNZ Manufacturing PMI falling to 45.5 and expectations of further RBNZ policy easing undermining its strength. Concerns about China’s economic recovery also weigh on NZD, given New Zealand’s trade reliance. Meanwhile, the Australian dollar faces similar pressures but benefits from stable commodity prices and a delayed RBA policy decision, which has already been priced into the market. With technical resistance at 0.58 for NZD/USD and further declines likely, AUD/NZD could see a slight upward move, with AUD gaining ground as NZD sentiment remains more bearish.

The future development of the EUR/GBP currency pair will depend on economic and political factors in the Eurozone and the UK. The Eurozone is facing challenges especially in its key economies such as Germany and France, which may limit the Euro's appreciation despite the improvement in the services sector. The European Central Bank remains cautious on interest rates due to persistent inflationary pressures and economic weakness. The UK, on the other hand, is struggling with rising inflation and fears of economic stagnation, which could weaken the Pound, especially if the Bank of England adopts a dovish tone on future interest rates. Monetary policy differences between the ECB and the Bank of England will be key, as will economic data from both regions, which could lead to further volatility in EUR/GBP, with the specific move depending on which economy shows more strength or weakness. However, based on the current economic situation, it can be assumed that if the problems in the Eurozone, particularly in Germany and France, persist and the ECB remains cautious about cutting interest rates, while the UK continues to struggle with inflation and economic stagnation, EUR/GBP could move in a range with moderate pressure on the Pound to strengthen.

The AUD/CAD pair is likely to remain under pressure due to contrasting economic signals and commodity influences. While Canada’s housing starts surprised positively at 262.4K, signaling resilience in the housing market, broader concerns over Canada’s economic growth and sluggish retail sales limit CAD’s upside. Oil prices remain stable above $74 per barrel, offering modest support to the Canadian dollar. On the other hand, the Australian dollar remains vulnerable, unable to break above the 0.64 level amid risk-off sentiment and concerns about China’s economic slowdown, Australia’s key trade partner. Weak global sentiment and RBA’s reluctance to act until February or March further cap AUD gains. Given this backdrop, CAD appears to have a slight edge over AUD, with the pair expected to drift lower as AUD weakness persists.

The EUR/USD pair is likely to remain under pressure in the near term as the USD strengthens on the back of steady inflation data (0.3% MoM, 3.3% YoY) and rising US Treasury yields (10-year yield at 4.23%). The USD gains additional support from robust real earnings growth and positive small business sentiment, while geopolitical tensions further elevate demand for the safe-haven currency. In contrast, the EUR faces headwinds from expectations of an ECB rate cut, political instability in Germany and France, and weak Eurozone manufacturing data. Diverging between the strenght  amplify downside risks for EUR/USD, with the pair struggling to break above 1.06 and likely to test lower levels near 1.05.

The USD/CAD pair is likely to maintain its bullish trajectory as contrasting monetary policies between the Fed and the BoC fuel USD strength. The Fed’s steady inflation narrative and robust real earnings growth, combined with rising US Treasury yields, bolster the USD. Meanwhile, the BoC’s 50-basis-point rate cut highlights Canada’s economic struggles, including rising unemployment and slowing growth. Stable oil prices provide limited support to the CAD, but the pair is expected to break higher toward resistance at 1.43, with continued momentum in favor of the USD.

The EURUSD pair is likely to face downward pressure in the coming period. The ECB's anticipated 25-basis-point rate cut and weak German CPI data contrast sharply with the USD's resilience supported by rising U.S. Treasury yields and expectations of Federal Reserve rate stability. Eurozone trade deficits and political uncertainties in Italy further weaken the EUR, while the USD benefits from safe-haven demand amid global tensions. The diverging monetary policy paths between the ECB and Fed, coupled with the EUR's sensitivity to Middle East geopolitics, suggest a continued move towards the 1.05 level for EURUSD.

The USDCAD pair is expected to trend higher in the coming period. The USD maintains its strength supported by rising U.S. Treasury yields, expectations of Federal Reserve rate stability, and safe-haven demand amid global uncertainties. In contrast, the CAD is under pressure due to expectations of a 50-basis-point rate cut by the Bank of Canada, weak oil prices around $72 per barrel reflecting soft energy demand, and downward revisions to Canadian GDP growth forecasts. The widening interest rate differential favors the USD, while geopolitical risks and trade uncertainties add further headwinds to the CAD's performance. These factors collectively point towards USDCAD appreciation.

The EUR/USD pair is likely to face downward pressure in the near term. The US dollar's resilience, despite mixed jobs data, contrasts with the euro's vulnerability due to political uncertainties in France and Germany. While the ECB is expected to cut rates by 25 bps, potentially weakening the EUR, the Fed's anticipated rate cuts are already priced in, limiting further USD weakness. The EUR's failure to hold above 1.06 after US jobs data signals further downside risks. Weak Eurozone inflation expectations and sluggish growth outlook cap EUR upside potential, while the USD benefits from safe-haven demand amid mixed macroeconomic signals. The pair may continue to test lower levels.

The USDCAD pair is poised for further upside in the near term. The CAD faces significant headwinds, including a surge in unemployment to 6.8% in November, falling oil prices, and increased expectations of Bank of Canada rate cuts. In contrast, the USD remains resilient despite mixed jobs data, benefiting from safe-haven demand and favorable rate differentials. The pair's surge to multi-year highs above 1.4150 reflects the CAD's weakness and the USD's strength. With the BoC's dovish stance amid deteriorating economic indicators and the Fed's more measured approach to potential rate cuts, the USDCAD pair is likely to maintain its upward trajectory.

The EUR/USD pair faces downward pressure amid diverging monetary policies and economic fundamentals. Weak German manufacturing PMI and political instability in France highlight structural challenges in the Eurozone, while stronger-than-expected U.S. labor market data and resilient manufacturing lend support to the USD. Although Fed rate cut expectations remain high, they are overshadowed by the ECB’s data dependency and potential easing measures. Rising U.S. Treasury yields and geopolitical tensions favor USD strength, capping EUR/USD recovery near the 1.05 level. Without significant improvement in European economic data or a resolution to political dysfunction, the pair remains vulnerable to further declines.

The USD/CAD pair may continue testing key resistance levels as diverging economic indicators play out. While strong U.S. labor data and high Treasury yields underpin USD demand, rising oil prices due to OPEC+ production cuts and sanctions on Iran provide support for CAD. Canadian bonds’ relative outperformance suggests market positioning for potential BoC adjustments, but ongoing U.S. geopolitical tensions and trade rhetoric present downside risks for CAD. The pair remains sensitive to broader commodity price trends and upcoming Canadian economic data. Near-term, USD strength may prevail, but CAD resilience could temper gains.

The EUR/USD pair is facing sustained downward pressure driven by a combination of broad USD strength and persistent eurozone political instability. Strong US economic resilience, reflected in the better-than-expected ISM Manufacturing PMI at 48.4 and elevated Treasury yields above 4.2%, continues to support the dollar. Meanwhile, political risks in Europe, such as Marine Le Pen’s no-confidence vote threat and the widening French bond spreads, weigh heavily on the euro. Additionally, divergence in monetary policy between the hawkish Fed and the ECB reinforces the bearish EUR/USD sentiment. Weak macroeconomic data from Germany and France further amplify downside risks, with resistance near 1.05 keeping the pair in a dominant downtrend. The latest US JOLTS Job Openings data, highlights a reading of 7.744M for October, exceeding expectations and reflecting ongoing labor market resilience in the US. This adds to the USD’s strong momentum, further pressuring the EUR/USD pair.The broader risk of a move toward parity remains as geopolitical uncertainty and robust USD demand limit any recovery for the euro.

The USD/CAD pair is poised for upward momentum, driven by USD strength and CAD vulnerability to geopolitical risks. Strong US economic data, dovish Fed signals, and safe-haven demand for the USD provide solid support, while CAD faces downside risks from Trump’s tariff threats and volatile oil markets. Although Canada’s improved GDP outlook in 2025 and fewer BoC rate cuts lend some support to CAD, near-term geopolitical uncertainties and the Fed’s influence on USD strength could push USD/CAD higher, potentially testing the 1.41-1.42 level in the coming weeks. In the darkness sccenario for CAD the tariff risks could push USD/CAD to as high as 1.50-1.55.

The AUD/NZD pair could see subdued but bearish movement, driven by contrasting economic fundamentals. The AUD suffers from a wider-than-expected Q3 Current Account deficit and a cautious RBA delaying rate cuts to mid-2025, while the NZD faces external pressures from USD strength and limited domestic support. However, NZD’s outperformance against other majors, including AUD, reflects its relative resilience. With geopolitical risks and subdued trade performance weighing more heavily on AUD, the pair could trend lower toward recent support levels, particularly if AUD fails to break above the 65-cent handle against USD.

EUR/USD is poised to remain under bearish pressure, driven by a confluence of strong USD fundamentals and ongoing EUR vulnerabilities. The USD benefits from robust economic data, hawkish Federal Reserve expectations, and safe-haven demand amplified by geopolitical tensions, such as Trump’s tariff threats on BRIC nations. Additionally, strong U.S. equity market performance underscores investor confidence in the USD, while stable inflation expectations limit excessive currency fluctuations. Conversely, the EUR struggles with mounting political risks, particularly in France, where fiscal uncertainty and the prospect of a no-confidence vote further erode investor sentiment. A dovish ECB, underpinned by subdued growth expectations and steady core inflation at 2.7%, leaves the EUR vulnerable. Seasonal factors in December suggest potential USD weakness, but resistance for EUR/USD at 1.0570–1.0600 and downside risks near 1.0465–1.0500 indicate limited recovery potential. The pair will likely trend lower unless a significant shift in Eurozone political or economic conditions emerges.

USD/CAD faces a mixed outlook, with short-term bearish pressures likely influenced by historical seasonal factors and profit-taking on USD positions. Historically, USD/CAD has recorded five negative returns in December over the past seven years, slightly favoring CAD during this period. Additionally, weaker oil prices and Trump’s tariff threats on Canadian imports present headwinds for CAD. However, the broader macroeconomic backdrop supports a stronger USD due to robust U.S. economic data, hawkish Federal Reserve expectations, and a resilient labor market. While softening Treasury yields and seasonal tendencies for USD weakness could limit immediate gains, the overall outlook leans toward favoring the USD due to its fundamental economic strength. The Bank of Canada’s upcoming policy decision and Canadian labor market data will be pivotal, but unless Canada delivers unexpectedly positive economic surprises, the USD’s superior fundamentals are likely to dominate in the medium term.

AUD/NZD is likely to see continued downside momentum as the AUD struggles against a relatively resilient NZD. Australia’s weak economic momentum, exacerbated by geopolitical uncertainties and a cautious RBA stance, limits the AUD’s potential for gains. In contrast, the NZD benefits from stronger domestic fundamentals, including improving business confidence, declining inflation expectations, and stability in economic activity metrics such as the Own Activity Outlook. Seasonal trends favoring NZD resilience further support the currency, while global risk-off sentiment disproportionately impacts the AUD. Unless China’s economic recovery or a hawkish pivot by the RBA materializes, AUD/NZD is expected to remain under pressure, favoring the NZD in the near term.

EURUSD appears poised for a mixed trajectory in the short term. Broad-based USD weakness, driven by declining 10-year Treasury yields and month-end portfolio rebalancing, has allowed the pair to rise above 1.0550. However, U.S. economic resilience, as evidenced by strong GDP growth and labor market performance, underpins medium-term USD strength, capping potential EUR gains. On the EUR side, slowing economic growth in Germany and mixed inflation trends limit the upside, while the ECB’s restrictive policy stance provides some stability. Trade uncertainties and weak consumer confidence in the Eurozone further weigh on the EUR. Thus, the pair may consolidate in the near term, with potential for a slight upward drift if USD sentiment remains weak, but longer-term gains for EURUSD will likely be limited by divergent fundamentals.

USDCAD may see slight upward pressure for the USD in the near term, given the divergence between U.S. and Canadian fundamentals. U.S. economic resilience, reflected in strong GDP and labor market data, supports USD strength, while falling Treasury yields and month-end rebalancing provide temporary softening. For the CAD, lower oil prices and tariff uncertainties create headwinds, while the BoC’s hawkish stance and domestic consumption trends provide some stabilization. However, the Canadian economy’s reliance on energy exports and trade ties with the U.S. suggests continued vulnerability. Overall, USDCAD could edge higher if U.S. economic outperformance persists, but near-term volatility is likely.

AUDNZD is likely to favor the AUD in the short to medium term. Australia’s robust private capital expenditure, tight labor market, and hawkish RBA stance contrast with New Zealand’s slower growth and the RBNZ’s less aggressive monetary approach. While the NZD benefits from strong dairy prices and moderate inflation, its reliance on Chinese demand and vulnerability to global risk sentiment weigh on its performance. In comparison, Australia’s relative economic strength and potential upside from Chinese stimulus bolster AUD sentiment. Thus, AUDNZD could see upward momentum, supported by Australia’s domestic resilience and favorable external conditions.