EUR/USD Price Forecast: Firmer US Dollar ahead of critical United States data

EUR/USD Current price: 1.1677

• Geopolitical turmoil boosted demand for the US Dollar at the beginning of the week.
• The American session will bring the release of the December ISM Manufacturing PMI.
• The EUR/USD pair is technically bearish in the near-term, support at 1.1640.

The US Dollar (USD) started the week on a strong footing, sending EUR/USD to its lowest in roughly a month at 1.1672. The Greenback surged on the back of mounting geopolitical tensions: Early on Saturday, United States (US) President Donald Trump conducted an operation in Venezuela, capturing President Nicolás Maduro and his wife, Cilia Flores, and bringing them to the US to be judged. Charges include narco-terrorism and possession of machine guns and destructive devices.

President Trump offered a press conference later on Saturday and stated, “We will run the country until such time as we can do a safe, proper, and judicious transition,” referring to Venezuela. At this point, Venezuelan Vice President Delcy Rodriguez has been named acting President, and after initially condemning Trump’s action, later said Venezuela is willing to cooperate with the US.

On the data front, the EU did not publish relevant data. After Wall Street’s opening, the Institute for Supply Management (ISM)will release the December Manufacturing Purchasing Managers’ Index (PMI). The index is foreseen at 48.3, slightly better than the 48.2 posted in November.

Meanwhile, the focus this week will be on US employment data, as the country will see the release of multiple job-related figures ahead of the Nonfarm Payrolls (NFP) report scheduled for Friday. The data could affect the market’s view of what the Federal Reserve (Fed) may or may not do at upcoming meetings.

EUR/USD short-term technical outlook

From a technical point of view, the 4-hour chart for EUR/USD shows it trades a handful of pips below the daily opening. The same chart shows the 20-period Simple Moving Average (SMA) extends its slide below the 100-period SMA, both above the current level, while the 200-period SMA maintains its bullish slope at around 1.1669, providing nearby support, but hinting at increased selling interest. Technical indicators support the view, as the Momentum indicator aims lower, below its midline, while the Relative Strength Index (RSI) indicator sits at 32. The 20-period SMA at 1.1730 offers immediate resistance ahead of the 100-period SMA at 1.1743.

In the daily chart, EUR/USD eased after failing to surpass the 20-day Simple Moving Average (SMA), which is now flat at 1.1738. The pair remains above the 100- and 200-day SMAs, which slope higher, limiting the bearish potential. At the same time, the Momentum slips below 0 and extends lower, indicating building bearish pressure. Finally, the RSI at 43.7 tilts negative, suggesting the pair may extend its intraday slide.

(The technical analysis of this story was written with the help of an AI tool)