EUR/USD Price Forecast: Sellers are not yet done

EUR/USD Current price: 1.0197

• The US Dollar extends its rally on Monday as investors price in no rate cuts in the US.
• The macroeconomic calendar remains empty, leaving majors at the mercy of sentiment.
• EUR/USD is oversold in the near term, but an interim bottom is not yet confirmed.

The EUR/USD pair fell to fresh muti-month lows, trading below the 1.0200 mark for the first time since November 2022. The US Dollar (USD) gapped higher at the weekly opening, retaining the momentum triggered last Friday by the Nonfarm Payrolls (NFP) report. The monthly United States (US) employment report showed the labor market in the world’s largest economy remained strong in December while wage pressures receded. The figures gave the Federal Reserve (Fed) plenty of room before trimming interest rates again.

The idea that the Fed will keep rates on hold at least throughout the first half of 2025 sent stock markets into a selling spiral, with Asian and European markets trading in the red on Monday. The USD soared and seems poised to extend its gains.

Data-wise, the economic calendar has nothing relevant to offer until Tuesday when the US will release the December Producer Price Index (PPI) ahead of the Consumer Price Index (CPI) on Wednesday.

EUR/USD short-term technical outlook

The daily chart for the EUR/USD pair shows that it is down for a fifth consecutive day and that the bearish momentum is solid. The pair is well below all its moving averages, with the 20 Simple Moving Average (SMA) currently providing dynamic resistance at 1.0370. The 100 SMA, in the meantime, extends its slide below the 200 SMA, both far above the shorter one. Finally, technical indicators head firmly south within negative levels, approaching oversold readings without signs of downward exhaustion.

The near-term picture shows extreme conditions, yet the overall outlook is bearish. The 4-hour chart shows EUR/USD developing far below bearish moving averages with the 20 SMA at around 1.0275. Meanwhile, technical indicators have turned flat at lows, with the Relative Strength Index (RSI) indicator consolidating at around 24.

Support levels: 1.0175 1.0130 1.0095

Resistance levels: 1.0245 1.0280 1.0325