The EUR/USD pair pulls back after an attempt to break above 1.06 during the early European session, driven by a combination of geopolitical and monetary policy concerns. Growing fears over potential US tariffs on imports from Europe cast a shadow on the Eurozone's economic outlook. If enacted, such tariffs could dampen European export competitiveness, further weakening the Euro.

Markets are increasingly pricing in a 25 basis points cut of the ECB’s deposit rate during its December 12 meeting. A Reuters poll highlights that nearly all but two of 75 economists expect this move. The anticipated cut reflects the ECB's commitment to boosting growth amid sluggish economic conditions but weighs heavily on the shared currency in the near term.

Technically speaking, the EUR/USD appears to be intensifying pressure against the 1.06 level, signaling a potential breakout on the horizon. If the pair successfully breaches this resistance, the next target could be the 1.07 level, aligning with the descending trendline formed by the two previous price peaks:

The British Pound treads waters ahead of crucial US employment release as market participants digest recent comments from BoE officials. BoE Monetary Policy Committee member Megan Greene highlighted that UK inflation could remain above the 2% target in the medium term due to robust wage growth. Echoing Greene’s concerns, BoE Governor Andrew Bailey expressed confidence in ongoing disinflationary trends but acknowledged that further efforts are required to bring inflation to the target range. With no major UK economic indicators expected shortly, market sentiment regarding the December 19 BoE meeting appears to be wobbly. Traders widely expect the central bank to hold rates steady at 4.75%.

On the technical side, the pair appears to be on the verge of an upside breakout of the resistance level, which could signify a shift in momentum as the pair prepares for a sustained rally:

Gold shows resilience, climbing to $2,640 in European trading hours after recovering from intraday losses. The precious metal's movements reflect cautious positioning ahead of the US NFP data, a key indicator for Federal Reserve policy. The US economy is expected to have added 200K jobs in November, rebounding sharply from the hurricane-affected figure of 12K. However, the unemployment rate is projected to edge up to 4.2% from 4.1% signaling potential labor market cooling. Average Hourly Earnings are anticipated to grow by 3.9% YoY, slightly lower than October's 4%. A deceleration in wage growth aligns with the Federal Reserve's goal of curbing inflation but raises questions about the broader health of consumer spending. If labor market data shows signs of significant slowdown or wage deceleration, it may bolster the case for further monetary easing, potentially driving gold prices higher.