EUR/USD Price Forecast: Optimism fuels Euro demand

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0400

The Hamburg Commercial Bank upwardly revised the December Eurozone PMIs.
Talks about plans of narrower than anticipated US tariffs weighed on the US Dollar.
EUR/USD advances on a better mood, meets sellers around 1.0430.

The EUR/USD pair advances at the beginning of the week, holding near an intraday high of 1.0431 posted during European trading hours amid a better market mood.

Data coming from the Eurozone failed to impress despite upbeat figures. The Hamburg Commercial Bank (HCOB) released the final estimates of the December Purchasing Managers’ Index (PMI), showing services output was slightly better than previously anticipated, confirmed at 51.6 from a preliminary estimate of 51.4.

The Composite PMI resulted at 49.6, slightly better than the 49.5 expected, yet still indicating contraction. The official report noted that the soft figure resulted from shrinking activity levels amid sustained falls in new business and employment. There was also an intensification of inflationary pressures, while firms’ growth expectations for the coming 12 months remained weak despite improving to a three-month high.

United States (US) headlines boosted the mood, as the Washington Post reported that Donald Trump's transition team is said to be working on tariffs. According to people familiar with the matter, tariffs will focus on key sectors deemed vital to national security, such as defense, medical supplies, and energy, narrowing the universal tariffs plan that generated concerns. As a result, the US Dollar came under strong selling pressure across the FX board.

The macroeconomic calendar includes the preliminary estimate of the German Harmonized Index of Consumer Prices (HICP) and US November Factory Orders. Also, S&P Global will publish the final estimates of the December US Services and Composite PMIs.

EUR/USD short-term technical outlook

The EUR/USD pair trimmed most of last week’s losses and hovers around 1.0400 ahead of the US opening. In the daily chart, however, sellers are aligned around a bearish 20 Simple Moving Average (SMA), providing dynamic resistance at 1.0430. At the same time, the 100 and 200 SMAs converge around 1.0800 with modest downward slopes. Finally, technical indicators have bounced from oversold levels, maintaining upward slopes yet within negative levels.

EUR/USD is bullish in the 4-hour chart, although a bearish 100 SMA rejected advances around the mentioned intraday high. The pair, however, found near-term support in a now flat 20 SMA, which limits the downside at around 1.0325. Meanwhile, technical indicators crossed their midlines, maintaining their firm upward slopes well above them.

Support levels: 1.0370 1.0325 1.0280

Resistance levels: 1.0430 1.0475 1.0510

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 edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.