Navigating Holiday Liquidity: A Technical Forecast for Major FX Pairs

As traders prepare for the final full trading week of 2025, spanning December 21st to 26th, market participants face the unique challenges of thinning holiday liquidity. This environment often amplifies price movements and can lead to increased volatility, making a clear technical roadmap essential for navigating the currency markets.

Critical Chart Levels for Major Currency Pairs

Analysis of key pairs reveals several pivotal zones that are likely to dictate price action in the coming days.

  • EUR/USD: The pair is currently testing a major confluence zone near 1.0850, which represents the 200-day moving average and a key Fibonacci retracement level. A sustained break above could target 1.0950, while failure may see a retest of support at 1.0750.
  • GBP/USD: Cable remains contained within a descending channel. Immediate resistance sits at 1.2650, with a break higher potentially opening the path toward 1.2750. Support is firmly established at the 1.2500 psychological handle.
  • USD/JPY: The pair continues to be driven by yield differentials. Watch for a reaction at the 148.00 level, which has acted as both support and resistance throughout the quarter. A hawkish shift in BoJ rhetoric could trigger a sharp move lower.

Trading Considerations for the Holiday Week

With many institutional desks operating on skeleton crews, volume is expected to decline significantly, particularly after December 24th. This can result in exaggerated spikes and unpredictable whipsaws. Traders are advised to:

  • Reduce position sizes to account for higher volatility and wider spreads.
  • Place wider stop-loss orders to avoid being taken out by erratic, low-volume moves.
  • Focus on the larger timeframes (4-hour and daily charts) for more reliable signals, as lower timeframe noise will be amplified.
  • Be mindful of the economic calendar, which is light but includes the US Core PCE Price Index data on December 23rd.

The week concludes on Friday, December 26th, with many global markets closed for the Boxing Day holiday, effectively ending the active trading year for many participants.