EUR/USD Price Analysis – Jan 24, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its upward trend, reaching an intra-day high of 1.0515.
This bullish rally was driven by positive economic data from the Eurozone. Another factor supporting the EUR/USD rally is the decline in the US Dollar’s (USD) strength.
Moving ahead, the key focus for the EUR/USD pair will be the Federal Reserve’s policy decision on Wednesday, with rates expected to stay at 4.25%-4.50%.
Investors will also pay close attention to Fed Chair Jerome Powell’s comments for policy clues. Meanwhile, January’s US S&P Global PMI data at 14:45 GMT could affect EUR/USD sentiment.
Euro Gains Momentum on Strong PMI Data but Faces Dovish ECB Outlook
The shared currency has gained strength after encouraging economic data from the Eurozone. On the data front, the Hamburg Commercial Bank (HCOB) reported that the preliminary Composite Purchasing Managers Index (PMI), compiled by S&P Global, improved in January, rising to 50.2 from 49.6 in November.
This marks a return to growth after two months of contraction. Economists had expected the PMI to decline slightly to 49.7, but the better-than-expected data suggests cautious optimism for the region’s economy.
The report showed strong demand for labor and new business growth in the services sector, though the manufacturing sector still faces issues like layoffs and declining orders. Dr. Cyrus de la Rubia, Chief Economist at HCOB, said the start of the year is "mildly encouraging," with cautious growth in the private sector.
Although the positive PMI has helped the Euro in the short term, its overall outlook remains uncertain. The European Central Bank (ECB) is expected to lower its Deposit Facility rate by 25 basis points to 2.75% in its upcoming meeting. As inflation is expected to ease, the ECB may continue its cautious approach, limiting the Euro's long-term growth.
US Dollar Weakens Amid Trade Deal Hopes and Fed Policy Anticipation
On the US front, the broad-based US Dollar has weakened amid increasing bets of rate cuts. The US Dollar Index (DXY), which tracks the Dollar’s value against six major currencies, fell 0.6% on Friday, hitting a fresh five-week low near 107.45.
This decline followed remarks from former President Donald Trump, who suggested he could reach a trade deal with China without imposing heavy tariffs.
During his election campaign, Trump had threatened to impose 60% tariffs on China and 25% on other North American economies, which supported the Dollar's earlier strength.
However, his recent comments about a potential deal have reduced market fears of aggressive trade measures.
Trump’s statement at the World Economic Forum (WEF) in Davos, where he endorsed immediate interest rate cuts, further pressured the Dollar.
His remarks, along with easing trade tension expectations, shifted market sentiment and weighed on the Greenback.
Looking ahead, the Federal Reserve’s upcoming monetary policy decision on Wednesday will be a key event for the US Dollar.
While the Fed is expected to keep interest rates steady at 4.25%-4.50%, Fed Chair Jerome Powell’s statements will be closely analyzed for alignment with Trump’s views.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.04517, up 0.35%, as the pair continues to exhibit a bullish bias above the pivot point of $1.04324.
The currency pair is facing immediate resistance at $1.04971, with the next key levels to watch at $1.05329 and $1.05682. A break above these resistance zones could reinforce bullish momentum, potentially pushing the pair toward higher levels.
On the downside, immediate support is situated at $1.03721, with further safety nets at $1.03415 and $1.03012. The 50-day Exponential Moving Average (EMA) at $1.03986 provides dynamic support, suggesting that the short-term trend remains favorable for the bulls.
Holding above this level could further cement the bullish outlook, encouraging buyers to test higher resistance levels.
From a technical perspective, the upward movement is supported by improving sentiment and technical strength, with the pair maintaining its position above key support levels.
However, if EUR/USD fails to hold above the pivot of $1.04324, it could invite selling pressure, potentially driving prices toward immediate support levels.
Traders should closely watch the resistance at $1.04971, as a sustained move above this threshold could confirm further bullish sentiment. Conversely, a break below the pivot may expose the pair to further downside risk.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD maintains a bullish stance above $1.04324; immediate resistance is at $1.04971.
- The 50 EMA at $1.03986 offers dynamic support, reinforcing upward potential.
- A breakout above $1.04971 could drive the pair toward the next resistance at $1.05329.
EUR/USD is trading at $1.04517, up 0.35%, as the pair continues to exhibit a bullish bias above the pivot point of $1.04324.
The currency pair is facing immediate resistance at $1.04971, with the next key levels to watch at $1.05329 and $1.05682. A break above these resistance zones could reinforce bullish momentum, potentially pushing the pair toward higher levels.
On the downside, immediate support is situated at $1.03721, with further safety nets at $1.03415 and $1.03012. The 50-day Exponential Moving Average (EMA) at $1.03986 provides dynamic support, suggesting that the short-term trend remains favorable for the bulls.
Holding above this level could further cement the bullish outlook, encouraging buyers to test higher resistance levels.
From a technical perspective, the upward movement is supported by improving sentiment and technical strength, with the pair maintaining its position above key support levels.
However, if EUR/USD fails to hold above the pivot of $1.04324, it could invite selling pressure, potentially driving prices toward immediate support levels.
Traders should closely watch the resistance at $1.04971, as a sustained move above this threshold could confirm further bullish sentiment. Conversely, a break below the pivot may expose the pair to further downside risk.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.04323
Take Profit – 1.04961
Stop Loss – 1.04037
Risk to Reward – 1: 2.2
Profit & Loss Per Standard Lot = +$638/ -$286
Profit & Loss Per Mini Lot = +$63/ -$28
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD must hold above the pivot point at $1.03904 to sustain bullish momentum.
- Resistance levels at $1.04339 and $1.04844 remain key hurdles for further upside potential.
- A break below $1.03428 could expose the pair to further downside, testing the 50-day EMA at $1.03375.
The EUR/USD pair is trading at $1.04117, down 0.12%, as the currency pair navigates a cautious market environment amid evolving macroeconomic conditions. The price remains slightly above the pivot point at $1.03904, which acts as a critical level for near-term directional bias.
A sustained move above this level could bolster bullish sentiment, targeting immediate resistance at $1.04339, with subsequent levels at $1.04844 and $1.05352. However, failure to break above the resistance zones may limit upside momentum, keeping the pair within a consolidation phase.
On the downside, immediate support is seen at $1.03428, followed by key support at $1.02906 and $1.02388. A break below these levels could invite further selling pressure, potentially driving the pair toward lower support zones and increasing bearish sentiment in the market.
The 50-day EMA, currently at $1.03375, is providing a key dynamic support level, reinforcing the significance of maintaining levels above $1.03910 to sustain a bullish outlook.
From a technical perspective, the pair remains in a neutral to slightly bullish trend, with buyers expected to step in above $1.03910, targeting $1.04636 as a near-term profit objective.
However, downside risks persist, with a stop-loss level at $1.03388 to mitigate potential losses. Traders should watch for upcoming economic releases and market sentiment shifts that could influence price action.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.03910
Take Profit – 1.04636
Stop Loss – 1.03388
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$726/ -$522
Profit & Loss Per Mini Lot = +$72/ -$52
EUR/USD Price Analysis – Jan 22, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair sustained its upward trend and remained well bid around the 1.0448 level, reaching an intra-day high of 1.0452.
However, the major factor behind this upward trend is largely attributed to investor sentiment, as market participants cautiously await further details on the United States (US) tariff plans.
These plans could have a impact on the Eurozone, and traders are closely monitoring any developments that might create fresh opportunities or risks for the EUR/USD exchange rate.
Despite the recent gains, the outlook for EUR/USD remains uncertain, as geopolitical and economic factors continue to shape its direction.
President Trump’s threats of imposing tariffs on the Eurozone add an element of volatility, while the European Central Bank (ECB) is expected to ease some of its restrictive policies, moving toward a more neutral 2% inflation target.
This could provide some support to the euro. However, with mixed signals coming from both the US and Eurozone economies, the EUR/USD pair's performance will depend on how these factors unfold in the coming days.
EUR/USD Outlook Uncertainty Amid US Tariff Threats and ECB Rate Cuts
On the EUR front, the shared currency has shown a significant recovery in recent days. However, the outlook for EUR/USD remains uncertain due to concerns over US tariffs. President Trump has threatened to impose tariffs on the Eurozone, adding pressure to the currency pair.
In response, European Union (EU) officials have emphasized that instead of retaliating, the EU should focus on improving its competitiveness and developing stronger capital markets. This shift in strategy is meant to better position the region in the face of potential trade tensions.
Meanwhile, ECB President Christine Lagarde spoke at the World Economic Forum, stating that Europe must be ready for any US tariffs. She also mentioned that the tariffs would likely be more selective in nature.
The ongoing trade tension between the EU and US has worsened since Trump’s withdrawal from the Paris Climate Agreement, which had set targets for reducing greenhouse gas emissions. This move has further strained EU-US relations, with the possibility of more economic challenges ahead.
On the monetary policy front, traders expect the European Central Bank (ECB) to cut interest rates by 25 basis points (bps) in each of its next four meetings.
ECB policymaker Yannis Stournaras has suggested that these cuts are necessary to bring inflation closer to the ECB’s 2% target by the end of 2025.
He also warned that US tariffs could speed up these rate cuts in the Eurozone, adding further uncertainty to the market.
Therefore, the news of potential US tariffs on the Eurozone, along with ECB rate cuts and trade tensions, adds uncertainty to the EUR/USD pair. This could lead to increased volatility, with the euro potentially weakening if tariff threats intensify or if rate cuts accelerate.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.04117, down 0.12%, as the currency pair navigates a cautious market environment amid evolving macroeconomic conditions. The price remains slightly above the pivot point at $1.03904, which acts as a critical level for near-term directional bias.
A sustained move above this level could bolster bullish sentiment, targeting immediate resistance at $1.04339, with subsequent levels at $1.04844 and $1.05352. However, failure to break above the resistance zones may limit upside momentum, keeping the pair within a consolidation phase.
On the downside, immediate support is seen at $1.03428, followed by key support at $1.02906 and $1.02388. A break below these levels could invite further selling pressure, potentially driving the pair toward lower support zones and increasing bearish sentiment in the market.
The 50-day EMA, currently at $1.03375, is providing a key dynamic support level, reinforcing the significance of maintaining levels above $1.03910 to sustain a bullish outlook.
From a technical perspective, the pair remains in a neutral to slightly bullish trend, with buyers expected to step in above $1.03910, targeting $1.04636 as a near-term profit objective.
However, downside risks persist, with a stop-loss level at $1.03388 to mitigate potential losses. Traders should watch for upcoming economic releases and market sentiment shifts that could influence price action.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD faces immediate resistance at $1.03720, with further upside barriers at $1.04338 and $1.05030, while support stands at $1.02406, $1.01867, and $1.01288.
- The pair is trading slightly above the 50-day EMA at $1.02841, hinting at a cautious bullish stance unless a decisive break below occurs.
- A sell strategy below $1.03304 is favored, with a take-profit target at $1.02405 and a stop-loss at $1.03851 to manage potential reversals.
EUR/USD is trading at $1.03055, up 0.38%, as the pair hovers around key technical levels amid cautious sentiment in the forex market. The pair has been attempting to recover from recent lows, but upside momentum remains constrained by overhead resistance levels.
On the 4-hour chart, the immediate pivot point stands at $1.03295, a critical threshold that the pair is currently testing. A decisive move above this level could open the door to further gains, with immediate resistance at $1.03720, followed by secondary hurdles at $1.04338 and $1.05030.
However, failure to sustain momentum above the pivot point may reinforce downside pressure, with key support levels at $1.02406, followed by $1.01867, and deeper support at $1.01288, which could act as potential rebound zones.
From a technical perspective, the 50-day EMA, currently positioned at $1.02841, suggests a mildly bullish bias, with prices hovering slightly above it. This could indicate short-term buying interest, but a sustained break below the EMA may signal renewed bearish pressure.
In conclusion, a short position below $1.03304 could offer a favorable risk-reward setup, targeting $1.02405 for take-profit, with a stop-loss placed at $1.03851, ensuring protection against potential upward spikes.
Traders are advised to monitor market sentiment closely, as upcoming economic data releases and geopolitical developments could introduce volatility.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.03304
Take Profit – 1.02405
Stop Loss – 1.03851
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$899/ -$547
Profit & Loss Per Mini Lot = +$89/ -$54
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Resistance Levels: Immediate resistance at $1.03720, followed by $1.04338 and $1.05131.
- Support Levels: Critical support lies at $1.02406, with deeper levels at $1.01867 and $1.01288.
- 50-Day EMA Barrier: The 50-day EMA at $1.02938 reinforces short-term bearish momentum, limiting upward attempts.
The EUR/USD pair is trading at $1.02866, down 0.09%, as it struggles to recover above the pivot point at $1.03196. The pair remains under pressure amid subdued market sentiment and a stronger U.S. Dollar, signaling potential downside risks.
Immediate resistance is located at $1.03720, with additional barriers at $1.04338 and $1.05131. On the downside, key support is seen at $1.02406, followed by deeper levels at $1.01867 and $1.01288.
The 50-day EMA at $1.02938 aligns closely with the current price action, providing a short-term barrier to any bullish attempts.
The inability to sustain above the pivot point suggests cautious sentiment, while a break below the immediate support at $1.02406 could intensify selling pressure, targeting lower levels.
From a technical perspective, a sustained move above $1.03196 is required to signal a potential bullish reversal, with an upside target of $1.03720.
Conversely, failure to hold above the pivot may lead to a retest of $1.02406, with further declines toward $1.01867 likely if bearish momentum persists.
Market participants should closely monitor the $1.03196 pivot point, as it serves as a crucial decision level for directional movement. While the broader trend remains bearish, a break above resistance could provide relief for the euro.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.03197
Take Profit – 1.02402
Stop Loss – 1.03606
Risk to Reward – 1: 1.9
Profit & Loss Per Standard Lot = +$795/ -$409
Profit & Loss Per Mini Lot = +$79/ -$40
EUR/USD Price Analysis – Jan 17, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair managed to halt its downward trend, gaining modest traction at 1.0303 and reaching an intra-day high of 1.0310.
The pair's recent decline can be attributed to investor focus on the upcoming inauguration of US President-elect Donald Trump on Monday.
Moreover, the Euro (EUR) remains under pressure due to a weak economic outlook, compounded by persistent dovish expectations surrounding the European Central Bank (ECB).
Traders are pricing in a 25 basis point rate cut by the ECB at each of its next four policy meetings, fueled by concerns over the Eurozone's economic growth and the subdued price pressures in the region.
EUR/USD Faces Downward Pressure Amid ECB Rate Cut Expectations and US Tariff Concerns
On the EUR front, the shared currency remains under pressure as the outlook for the Euro (EUR) stays weak. This is largely due to growing expectations that the European Central Bank (ECB) will continue with interest rate cuts.
Traders are predicting a 25 basis point rate cut by the ECB at each of its next four meetings, driven by concerns over the Eurozone's economic outlook and subdued price pressures.
On the other hand, the ECB is also showing a readiness for further rate cuts. The minutes from the December ECB meeting, released last Thursday, revealed that officials discussed easing policies more than pausing them.
There was even talk of a larger 50 basis point rate cut to address downside risks to growth, caused by both global and domestic political uncertainties. Ultimately, the ECB opted for a 25 basis point cut, signaling ongoing concerns about economic growth.
Therefore, the growing expectations of continued ECB rate cuts and concerns over the Eurozone's economic outlook, combined with potential US tariff hikes, put significant downward pressure on the EUR/USD currency pair, increasing the likelihood of further declines or even reaching parity.
US Dollar Remains Firm Amid Anticipation of Trump’s Economic Policies and Fed Rate Cut Expectations
On the US front, the broad-based US dollar is moving within Thursday’s trading range as investors keep a close eye on US President-elect Donald Trump’s upcoming inauguration on Monday.
The market is awaiting Trump’s economic policy announcements, which are expected to offer fresh insight into the US economic outlook and potential changes to global trade dynamics.
Many experts believe that Trump’s policies could lead to higher inflation and economic growth but also risk triggering a global trade war.
At a Senate Finance Committee meeting on Wednesday, Trump’s treasury pick, Scott Bessent, stressed the need to reform the current tax system to avoid a massive $4 trillion burden on the middle class.
He warned of an "economic calamity" if the tax system is not renewed and extended. Bessent also voiced support for Trump’s protectionist policies, arguing that they would help address unfair trade practices and give the US greater leverage in global negotiations.
Meanwhile, the US Dollar Index (DXY), which tracks the value of the US dollar against six major currencies, has shown a slight increase, holding key support at 109.00.
The US dollar remains firm, despite traders beginning to price in the possibility of at least one interest rate cut by the Federal Reserve this year.
This shift comes after the core Consumer Price Index (CPI), which excludes food and energy prices, slowed to 3.2% in December, its lowest rate in over four years, fueling expectations of a more dovish Fed stance.
Therefore, the US dollar's strength, driven by expectations of Trump’s policies and a firm US Dollar Index, puts downward pressure on the EUR/USD pair, potentially leading to further declines as traders anticipate Fed rate cuts.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.02866, down 0.09%, as it struggles to recover above the pivot point at $1.03196. The pair remains under pressure amid subdued market sentiment and a stronger U.S. Dollar, signaling potential downside risks.
Immediate resistance is located at $1.03720, with additional barriers at $1.04338 and $1.05131. On the downside, key support is seen at $1.02406, followed by deeper levels at $1.01867 and $1.01288.
The 50-day EMA at $1.02938 aligns closely with the current price action, providing a short-term barrier to any bullish attempts.
The inability to sustain above the pivot point suggests cautious sentiment, while a break below the immediate support at $1.02406 could intensify selling pressure, targeting lower levels.
From a technical perspective, a sustained move above $1.03196 is required to signal a potential bullish reversal, with an upside target of $1.03720.
Conversely, failure to hold above the pivot may lead to a retest of $1.02406, with further declines toward $1.01867 likely if bearish momentum persists.
Market participants should closely monitor the $1.03196 pivot point, as it serves as a crucial decision level for directional movement. While the broader trend remains bearish, a break above resistance could provide relief for the euro.
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EUR/USD Price Analysis – Jan 15, 2025
Daily Price Outlook
Despite the upbeat Eurozone Industrial Production data, the EUR/USD currency pair struggled to maintain its bullish momentum and shifted bearish around the 1.0311 level, hitting an intra-day low of 1.0287.
The downward shift could be attributed to cautious market sentiment ahead of the release of key US economic data.
Investors are eagerly awaiting the US Consumer Price Index (CPI) for December, due at 13:30 GMT, which will likely have a significant impact on market expectations for the Federal Reserve’s monetary policy.
Apart from this, the Euro faced pressure as investors adopted a wait-and-see approach before the return of President-elect Donald Trump to the White House.
Market participants are concerned that higher import tariffs under his administration may hurt Eurozone exports, making them more expensive for US buyers.
This uncertainty over trade policies contributed to the Euro’s weakness against the Dollar on Wednesday. As a result, the EUR/USD pair is consolidating near the 1.0300 level, reflecting the cautious mood among investors as they monitor developments on both sides of the Atlantic.
EUR/USD Struggles to Gain Momentum Amid Economic Concerns and US Trade Uncertainty
On the EUR front, the Euro remains weak against its major peers on Wednesday. Investors are cautious as they await the return of President-elect Donald Trump to the White House.
Meanwhile, the concerns are rising that his administration may introduce higher import tariffs, which could negatively affect Eurozone exports, making them more expensive for US importers. This uncertainty is putting pressure on the Euro, causing it to underperform.
In addition, worries about Eurozone economic growth and the potential for further interest rate cuts from the European Central Bank (ECB) are contributing to the Euro’s weakness.
The ECB has already cut its Deposit Facility rate by 100 basis points in 2024, and further rate cuts are expected.
ECB Chief Economist Philip Lane mentioned that inflation in the services sector is likely to decrease in the coming months, which could bring inflation closer to the ECB's 2% target.
However, some ECB policymakers, like Austrian Central Bank Governor Robert Holzmann, believe that the path to lower rates may not be as straightforward as it seems.
Holzmann pointed out that core inflation is still relatively high, and energy-related issues could complicate the ECB's decisions.
On the economic data front, Eurozone industrial output showed steady performance in November, with a slight 0.2% month-on-month increase.
This was slightly below the expected 0.3% rise, but it was consistent with the previous month’s performance.
However, the annual rate of industrial production dropped by 1.9% in November, which was a larger decline compared to October's 1.1% fall, in line with market expectations.
The combination of cautious investor sentiment, concerns over higher US import tariffs, and expectations of further ECB rate cuts is weighing on the Euro, leading to a weaker EUR. This is limiting EUR/USD's upside potential, keeping it near the 1.0300 level.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.03006, up 0.07%, as the pair consolidates below the critical pivot point at $1.03187. This level marks a key threshold for market direction.
The 50-day EMA at $1.03032 reinforces near-term resistance, aligning with a descending trendline. Immediate resistance stands at $1.03187, with further levels at $1.03683 and $1.04338. A failure to breach these levels could invite selling pressure.
On the downside, immediate support lies at $1.02392, followed by $1.01867 and $1.01288. A break below $1.02392 could open the door for further declines toward the $1.01867 level, intensifying bearish momentum.
The pair is currently trading within a downtrend, with lower highs and lows indicating continued bearish sentiment. The risk-to-reward setup favors selling at $1.03187, targeting $1.02392, with a stop loss at $1.03683.
This scenario presents a potential profit of $795 per standard lot against a risk of $496. The alignment of technical resistance levels with a bearish trendline further validates the downside bias.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Bias: EUR/USD faces resistance at $1.03187, aligning with the descending trendline.
- Support Levels: Key supports are $1.02392 and $1.01867, critical for gauging further declines.
- Risk-Reward Profile: Favorable sell setup with a 1:1.6 ratio, targeting $795 per standard lot profit.
EUR/USD is trading at $1.03006, up 0.07%, as the pair consolidates below the critical pivot point at $1.03187. This level marks a key threshold for market direction.
The 50-day EMA at $1.03032 reinforces near-term resistance, aligning with a descending trendline. Immediate resistance stands at $1.03187, with further levels at $1.03683 and $1.04338. A failure to breach these levels could invite selling pressure.
On the downside, immediate support lies at $1.02392, followed by $1.01867 and $1.01288. A break below $1.02392 could open the door for further declines toward the $1.01867 level, intensifying bearish momentum.
The pair is currently trading within a downtrend, with lower highs and lows indicating continued bearish sentiment. The risk-to-reward setup favors selling at $1.03187, targeting $1.02392, with a stop loss at $1.03683.
This scenario presents a potential profit of $795 per standard lot against a risk of $496. The alignment of technical resistance levels with a bearish trendline further validates the downside bias.
EUR/USD - Trade Ideas
Entry Price – Sell Above 1.03187
Take Profit – 1.02392
Stop Loss – 1.03683
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$795/ -$496
Profit & Loss Per Mini Lot = +$79/ -$49
EUR/USD Price Analysis – Jan 13, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair has been under significant pressure, sliding to a fresh two-year low near 1.0200 as the week begins.
This sharp decline is largely attributed to the strengthening of the US Dollar (USD), which has been performing well amidst soaring bond yields.
The US Dollar Index (DXY), which tracks the Greenback’s performance against six major currencies, has surged to nearly 110.00, marking the highest level seen in over two years.
Moreover, the Euro (EUR) is facing strong selling pressure due to a combination of factors, including a generally bleak market sentiment.
Investors are growing increasingly risk-averse as fears mount over the potential economic fallout from protectionist policies under US President-elect Donald Trump.
There are rising concerns that these policies could lead to a global trade war, which would undermine the stability of international markets and diminish the appeal of risk-sensitive assets like the Euro.
This growing uncertainty has left the EUR/USD pair vulnerable, with investors turning to the US Dollar as a safe-haven amidst the prevailing global economic jitters.
EUR/USD Faces Pressure Amid Global Trade Concerns and ECB's Dovish Stance
On the EUR front, the Euro (EUR) is facing significant selling pressure due to weak market sentiment. Investors are becoming more cautious as fears grow that US President-elect Donald Trump’s protectionist policies could lead to a global trade war.
During his campaign, Trump threatened that the European Union (EU) would face heavy penalties for not buying enough American exports, raising concerns about economic tensions between the US and Europe.
At home, the Euro is also under pressure from expectations that the European Central Bank (ECB) will continue to ease its monetary policy.
ECB Chief Economist Philip Lane recently suggested that more interest rate cuts are likely as the central bank seeks to prevent the economy from slowing down too much.
He mentioned that the ECB’s approach should be balanced, avoiding being too aggressive or too cautious in its decisions this year.
In addition to this, ECB policymaker Boris Vujčić commented that he is comfortable with market expectations for more interest rate cuts, but he pushed back against ideas of speeding up the current pace of easing.
Vujčić emphasized the need for gradual cuts in interest rates, given the uncertainty surrounding the global economy. This ongoing policy stance has kept the Euro weak, as investors remain wary of the ECB's actions.
Therefore, the combination of global trade war concerns, ECB's policy easing expectations, and cautious sentiment towards the Euro has led to continued weakness in EUR/USD, causing the currency pair to experience selling pressure and a downward trend.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.02137, down 0.26% on the day, reflecting bearish momentum as the dollar strengthens. On the 4-hour chart, the pivot point at $1.02487 serves as a crucial threshold for the pair’s short-term direction.
A sustained break below this level could push prices toward immediate support at $1.01664, with further downside targets at $1.01118 and $1.00691.
Resistance levels remain intact at $1.03198, $1.03632, and $1.04534. Notably, the 50-day EMA at $1.03232 highlights a bearish bias, with prices trading consistently below this average.
The RSI confirms downward momentum, although it is nearing oversold territory, which could signal a potential short-term consolidation.
The recommended strategy is to enter short positions below $1.02478, targeting $1.01656 while managing risk with a stop-loss at $1.02947.
A decisive break below $1.01664 could trigger an accelerated bearish move, while a rebound above the pivot point might shift sentiment toward the resistance zones.
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