Created on December 26, 2024

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• Amidst the Christmas holidays this week, the EUR/USD pair has stabilized within its broader downward trend around the 1.0400 support level.
• As previously mentioned, the performance will remain bearish in the final trading sessions of 2024.
• The economic disparity and central bank policies continue to support the bears’ dominance over the trend.
• The US Dollar remains the strongest against other major currencies with the change in the US Federal Reserve’s policy direction for 2025, coupled with the demand for the US Dollar as a safe haven ahead of Trump’s inauguration as US President.

US Stock Markets Witness Gains

In the latest US stock market trading sessions, we have observed a rebound in US stock indices, led by gains in technology stocks. According to trading platforms, the S&P 500 index rose by 1.1%, and the Dow Jones gained 390 points, recording its best performance on a holiday since 2022. The Nasdaq 100 index led the rally, rising by 1.3%, its strongest performance on Christmas Eve since 2000. Among the top US gainers were Tesla shares, which rose by 7.3%, Amazon shares rose by 1.8%, Apple shares rose by 1.1%, and Broadcom shares jumped by 3%.

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This comes after strong performance on Friday and the previous Monday, which pushed the major indices closer to their record highs after a recent decline due to concerns about the US Federal Reserve’s actions. Investors are now focusing on interest rate expectations, with most expecting the Fed to keep US interest rates unchanged in January and March. Overall, US stock indices are on track for a strong year, with the Nasdaq 100, S&P 500, and Dow Jones expected to record gains of between 15% and 30%, driven by rising shares of chipmakers amid growing optimism about artificial intelligence demand.

Trading Tips:

We still believe that the downward trajectory of the euro/dollar may continue for a longer period of time until the vision regarding Trump’s official policies becomes clear

US Dollar around the highest in two years

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The change in the direction of the US Federal Reserve’s policy towards stopping the reduction and increasing chances that it will eventually raise it in response to Trump’s policies that stimulate US inflation figures again supported the recent gains of the US dollar. After the last meeting of 2024, it seems that the US Federal Reserve is now ready to keep interest rates higher for a longer period than the financial markets had previously expected. This situation pushed the US dollar to its highest in two years.

Trump’s trade wars, which are expected to happen soon after Trump’s inauguration as US president, are being prepared by global central banks because they have gone through these things and changes during Trump’s old term. Consequently, trading in 2025 will witness many surprises. We must be careful, rational and not take risks, no matter how strong the expectations are.

EUR/USD Analysis Today:

As is clear on the daily chart above, the overall trend of the EUR/USD currency pair remains bearish. As we mentioned earlier, the stability below the 1.0500 support confirms the strong dominance of the bears and indicates a stronger downward movement. Meanwhile, the expectations of the EUR/USD pair moving towards the parity level will increase sooner than previously expected if the pressure factors on the Euro continue and the US Dollar continues to gain from Trump’s trade. we still prefer selling the EUR/USD from every dip, considering that the low liquidity in the markets this week due to the Christmas holidays will prevent investors from taking risks until the markets return to full operation.

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