EUR/USD faces reduced risks after volatility, bearish trend continues

EUR/USD held steady at 1.1684 on Thursday, following three days of heightened volatility. This stabilisation comes as geopolitical and trade tensions between the US and Europe over Greenland ease.

US President Donald Trump has de-escalated tensions by ruling out the use of military force to gain control of Greenland and softening his tariff rhetoric towards European nations after reaching a framework agreement with NATO. However, the details remain unclear, and Denmark has already stated that it is not considering negotiations over transferring the territory to the US.

On the US domestic front, attention is shifting to the release of data on initial unemployment claims, which could provide further insights into the labour market. The Federal Reserve is expected to keep rates unchanged at its next meeting, although the market anticipates a total rate cut of 50 basis points by the end of the year.

The US dollar has seen general strength against the euro but continues to weaken against the Australian and New Zealand dollars.

Technical analysis

On the H4 chart, EUR/USD is consolidating around 1.1683. We anticipate a downward movement, with the potential for the bearish trend to continue towards 1.1628, possibly 1.1598. This scenario is supported by the MACD indicator, which shows the signal line above zero and pointing downward, reflecting ongoing bearish momentum.

On the H1 chart, a wave of decline is forming towards 1.1644. After reaching this level, a correction to 1.1690 is expected, followed by a further decline to 1.1620. This outlook is confirmed by the Stochastic oscillator, whose signal line is below 50 and pointing downward to 20.

Conclusion

EUR/USD remains in a consolidation phase, with a bearish trend still in play. Geopolitical tensions have subsided, but risks remain. Investors are closely watching US labour market data, which may influence the next moves for the dollar and euro. Technically, the pair remains in a downward bias, with key support levels at 1.1628 and 1.1598.