EURUSD Daily Market Report - December 31, 2025
December 31, 2025
•
Generated 12:12 PM
USD-lean
68% confidence
USD advantage (macro +0.27, news +0.21) into thin JPY holiday; 156.50 pivot for continuation to 157.20/158.00
Executive Summary
- USD structural advantage: CESI +4.06 Δ7d, level +16.23 vs EUR -8; US-DE 2Y spread +1.645% (Δ7d -0.05bp modest fade but still wide)
- JPY bank holiday creates thin Asia session; expect low conviction price action until London, then USD momentum resumes if Claims ≤215K
- 156.50 is pivot: hold above targets 157.20 then 158.00; break below 156.00 invalidates USD continuation and opens 155.20 retest
- NY Unemployment Claims (3:30pm Kyiv, High impact, fcst 215K vs 214K prior) is primary catalyst; inline/better = USD+, miss >220K = JPY safe-haven bid
- Confidence capped at 68% by holiday liquidity risk and modest 2Y spread narrowing Δ7d -0.05%; Friday US CPI is true directional driver
Why This Bias?
- MacroPulse +0.27 (82% confidence) driven by CESI divergence USD +16.23 vs EUR -8
- News bias USD_BULLISH +0.21 (77% confidence) ahead of Friday CPI
- JPY bank holiday thins liquidity; US Jobless Claims 215K forecast may extend USD momentum
Scenarios
Primary (Continuation)
Trigger: Hold 156.50 into London, then US Claims ≤215K confirms USD momentum
Targets: 157.20 (initial resistance), 158.00 (psychological extension)
Invalidation: Break and 4H close below 156.00
- MacroPulse +0.27 and news +0.21 support USD bid
- CESI divergence USD +16.23 vs EUR -8 underpins dollar strength
- Thin JPY holiday liquidity may see range compression until London open
- NY continuation confidence 70% aligns with Claims catalyst
Alternate (Reversal)
Trigger: Asia or London sweeps 156.80 then fails, or Claims >220K triggers safe-haven JPY bid
Targets: 156.00 (support retest), 155.20 (deeper pullback)
Invalidation: Reclaim and hold above 157.00
- Holiday liquidity can exaggerate moves; false breakout risk elevated
- US-DE 2Y spread narrowed Δ7d -0.05%, minor USD headwind
- Hike odds flat at 15% Δ7d +0pp, no Fed urgency to support USD
- Year-end position squaring may favor profit-taking on USD longs
Session Playbook
Asia
Expectation
Range-bound 156.20–156.80; JPY bank holiday thins participation, low conviction
Liquidity
Thin due to JPY holiday; expect choppy two-sided flow, avoid chasing breakouts
Key Levels
156.80 (Asia high, liquidity sweep candidate), 156.20 (Asia low, support)
London
Expectation
Continuation bias if 156.50 holds; liquidity returns, test 157.00–157.20 resistance zone
If/Then Logic
- IF hold 156.50 and reclaim 156.80 THEN target 157.20
- IF break 156.20 THEN fade to 156.00 ahead of NY Claims
Key Levels
157.20 (resistance), 156.50 (pivot), 156.20 (support)
New York
Expectation
Claims-driven: ≤215K extends USD to 157.20/158.00; >220K triggers reversal to 156.00
If/Then Logic
- IF Claims ≤215K and 157.00 breaks THEN momentum to 157.20 then 158.00
- IF Claims >220K THEN safe-haven JPY bid, sell rallies to 156.00 target
Key Levels
158.00 (extension), 157.20 (initial target), 156.00 (invalidation)
Market Drivers
Macro
MacroPulse +0.27 (82% confidence)
USD+
CESI divergence USD +4.06 Δ7d, level +16.23 vs EUR -8 favors USD; US data surprising to upside
US-DE 2Y spread +1.645% (Δ7d -0.05%)
USD+
Wide spread still favors USD, but modest Δ7d narrowing -0.05% is minor headwind
Fed hike odds 15% (Δ7d +0pp)
neutral
Flat pricing, no urgency; EUR-favoring per input but minimal impact on USDJPY
Rates & Yields
US 2Y 3.45%, 10Y 4.12%
USD+
Elevated real yields support USD; curve shape unknown but levels constructive
US-DE 2Y spread Δ7d -0.05%
mixed
Modest narrowing is minor USD headwind but absolute level +1.645% still wide
Cross-Market
Market Impact Score 0
neutral
No cross-market signal; equities/commodities not driving FX today
News
News bias USD_BULLISH +0.21 (77% confidence)
USD+
Headline 'Dollar Slightly Higher Before Friday US CPI Report' reflects positioning ahead of key data
Thins Asia liquidity, reduces conviction; can exaggerate moves or compress range
Risk Events
2:00am Holiday
JPY Bank Holiday
Expected: Thin liquidity in Asia session; expect range compression 156.20–156.80 with low conviction
Playbook: Avoid chasing breakouts in Asia; wait for London liquidity return to establish directional bias
3:30pm High
US Unemployment Claims
Expected: Forecast 215K vs 214K prior; inline or better (≤215K) extends USD to 157.20/158.00; miss >220K triggers safe-haven JPY bid to 156.00
Playbook: Primary catalyst for NY session; if ≤215K buy dips to 156.80 targeting 157.20; if >220K fade rallies to 156.50 targeting 156.00
5:30pm Low
Crude Oil Inventories
Expected: Minimal USDJPY impact; oil-USD correlation weak in current regime
Playbook: Monitor for risk sentiment shifts but not a trade trigger for USDJPY
7:00pm Low
Natural Gas Storage
Expected: No expected USDJPY reaction; domestic US energy data
Playbook: Ignore for FX positioning
Confidence Assessment
Disagreements
- US-DE 2Y spread narrowed Δ7d -0.05%, minor contradiction to broader USD+ macro bias
- JPY holiday thins liquidity, increasing risk of false breakouts and reducing signal quality
- Year-end positioning flows may override fundamental drivers; profit-taking risk on USD longs
What Would Change This Bias?
- US Unemployment Claims >220K would flip to JPY safe-haven bid, target 156.00 then 155.20
- Break and 4H close below 156.00 invalidates continuation, opens deeper pullback to 155.20
- Friday US CPI miss (<0.2% MoM core) would reverse USD advantage and favor JPY strength
- Risk-off event (geopolitical shock, equity selloff) would trigger JPY safe-haven flows regardless of data
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