EUR/USD Forecast: Investors run for safety ahead of first-tier events

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0829

The Q4 Euro Zone Gross Domestic Product came in better than anticipated.
The US Dollar gathers additional momentum ahead of central banks’ decisions.
EUR/USD turned bearish in the near term but holds above the critical 1.0800 threshold.

The EUR/USD pair plummeted to 1.0801 on Tuesday as demand for the US Dollar gained momentum throughout the first half of the day. Upbeat Chinese data failed to change the sour market mood as market participants maintain the focus on the upcoming central banks’ monetary policy decisions. The US Federal Reserve and the European Central Bank will announce their monetary policies within 48 hours. Asian indexes struggled for direction but finally gave up and turned negative, heavily weighing on their European counterparts.

The Euro remained on the back foot, despite a better-than-anticipated Euro Zone Gross Domestic Product (GDP). The preliminary estimate of the Q4 showed the economy grew at an annualized pace of 1.9%, better than the 1.8% anticipated by financial markets. On a negative note, German Retail Sales plunged by 5.3% MoM in December, much worse than expected. The American session will bring minor United States figures, with the main focus on CB Consumer Confidence, foreseen at 109.1 in January, up from 108.3 in December.

EUR/USD short-term technical outlook

The EUR/USD pair recovered from the mentioned low to trade at around 1.0830 ahead of Wall Street’s opening, as European stocks bounced off their early lows, maintaining the red. From a technical point of view, the daily chart shows that the pair is down for a fourth consecutive day, although recovering from around a bullish 20 Simple Moving Average (SMA), currently at around 1.0795. The longer moving averages remain far below the current level, with the 100 SMA aiming to cross above a flat 200 SMA. Technical indicators, in the meantime, keep heading south within positive levels, anticipating further declines without confirming them.

In the near term, and according to the 4-hour chart, the risk skews to the downside. The pair has fallen further below a now bearish 20 SMA and is struggling around a bullish 100 SMA. At the same time, technical indicators stand below their midlines, the Momentum is directionless while the RSI heads firmly south at around 38. A critical support level comes at 1.0745, the 61.8% retracement of its 2022 slump. Bears could take control of the pair if it breaks below it, although it seems unlikely ahead of the upcoming first-tier events.

Support levels: 1.0795 1.0745 1.0700

Resistance levels: 1.0855 1.0890 1.0930

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold extends gains nearing $4,200 as US Dollar struggles

Gold heads north for the second consecutive day, trading near $4,180, with bulls aiming for the $4,230 area, the top of October’s trading range. Precious metals have been boosted by lower US Treasury yields and dovish comments from Federal Reserve officials this week, which have undermined speculative support for the Greenback.

Busy week for Ripple’s RLUSD: What changes for stablecoin holders?

Ripple’s RLUSD is gaining ground across institutional finance, with a major bank launching custody services, a new wallet integration making it easier for developers to build payments and agentic experiences on the network, and a brokerage platform planning to use the stablecoin for settlement.

Hot inflation, falling yields: A new test for global markets

Global markets are confronting a difficult combination: renewed inflation pressure, expensive capital and growing scrutiny of the investment supporting the AI boom. The most revealing development this week was the demand for government bonds even as US inflation accelerated. My assessment is that investors should treat this as a test of financing resilience.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.