The new year has begun and the question is whether the US dollar is able to continue its uptrend against other major currencies and assets. The recent US data was impressive as the unemployment rate fell to 4.1%, while the number of new jobs excluding farming increased by more than 250K, which supported the US dollar.

According to the latest comments from the FOMC members, the Fed is likely to be more cautious when it comes to cutting rates. This is due to several factors. First, recent economic data leaves the FOMC enough room to hold the current rate level. Next, the new White House administration is likely to set import tariffs that may accelerate inflation. 

EUR/USD: General Downtrend with Corrections

The Euro is under pressure as the European Central Bank is likely to cut rates soon. The latest economic data was disappointing, including the German manufacturing sector to continue its downtrend. Moreover, the latest comments from ECB representatives are clear about the cut rates. According to officials, the European Central Bank will likely begin another round of monetary policy easing soon. 

The only thing that may prevent the ECB from being aggressive in cutting rates is inflation. While the target inflation is around 2%, which is a positive factor, service inflation is close to 4%. According to the ECB officials, they will closely monitor the situation.

When it comes to technical analysis, EUR/USD moves downwards. The currency pair stays below the SMA50, which means that the sellers are in control. RSI is moving upwards, which is a signal that a correction may occur. The current support level is at 1.0190. The next targets, in the case of the downside, will be 1.0150 and 1.0100. When it comes to the upside, the closest resistance level is at 1.0260. If the currency pair makes a breakout, the next target will be at 1.0310.

GBP/USD: The British Pound is Under Pressure

The British pound is under pressure similar to the Euro. The Bank of England is likely to make several rate cuts this year as the economy requires stimulation. Therefore, we can expect the BoE to act soon. However, it is worth looking at the upcoming data, including GDP m/m that will be released on Thursday. According to forecasts, the UK economic growth is 0.2% for the reported month. The inflation in the UK is close to 2%, which means that the Bank of England is free to engage.

The hourly chart shows that the GBP/USD is under pressure. The currency pair stays below the SMA50, which means that bears are in control. Moreover, we have consecutive lower highs, which is a sign of a downtrend. The RSI indicator is close to 70, but still below this level. The support level and the closest target on the downside is 1.2100. When it comes to the upside, the currency pair is able to resume moving higher after breaking 1.2235.

AUD/USD: The Australian Dollar is on the Downside

The rate theme is very important at the moment as most major central banks are on the eve of taking further steps. While the Fed is likely to wait until summer, the Reserve Bank of Australia is almost ready to cut rates during the upcoming meetings. The Australian labor market data that will be released this week may be another catalyst for the currency pair to resume its downtrend.

The technical picture is clear. While the AUD/USD currency pair is currently above the SMA50, the moving average still has a downside slope, which means that the asset is under pressure and bears are still controlling the market. The closest support is at 0.6160, which prevents the currency pair from moving to 0.6130. On the upside, 0.6200 acts as the closest resistance level.

XAU/USD: Gold Loses Ground to USD

While geopolitical tensions and economic fears are still in place, they are not influencing the market enough to push traders and investors to buy gold. Therefore, precious metals are not among the priorities of market participants. Currently, the US dollar is among the most popular assets due to many factors, including the upcoming inauguration in the United States that will take place on January 20, 2025.

The future US president has promised new import tariffs on goods coming from Canada, Mexico, the Eurozone, China and other countries and regions that could warm up inflation in the United States. 

On the technical side, XAU/USD is trading below the SMA50, which means that sellers control the market. The RSI indicator is in the neutral zone close to the oversold area. The closest support level is at 2,660. If gold breaks this level down, the next target will be at 2,645. On the upside, the SMA50 prevents the pair from targeting 2,700.