EUR/USD Price Forecast: US Dollar firmer as caution persists

EUR/USD Current price: 1.1673

• Mixed European data undermined the Euro's demand during London trading hours.
• The US December Challenger Job Cuts report brought a quite positive surprise.
• EUR/USD under pressure, sellers could challenge the weekly low at 1.1659.

Activity across the FX board remains limited on Thursday, with major pairs still confined to familiar levels. The US Dollar (USD) finds near-term support amid persistent caution among speculative interest and encouraging United States (US) employment data.

US-based employers announced 35,553 job cuts in December, down 50% from the 71,321 job cuts announced in November, according to the Challenger Job Cuts report. The report also indicated that December’s total is the lowest monthly total since 25,885 cuts were announced in July 2024.

Meanwhile, European data released earlier in the day was also mixed. In Germany, Factory Orders rose 5.6% in November, well above the -1% forecast. Still, the EU December Economic Sentiment Indicator resulted at 96.7, below the previous 97.1 and the expected 97. Additionally, the Producer Price Index (PPI) rose in November by 0.5% on a monthly basis, from the 0.1% posted in October. The annual PPI printed at -1.7%, lower than the -0.5% from the previous month.

The US will release weekly unemployment figures and the October Trade Balance after Wall Street’s opening, alongside Q3 Nonfarm Productivity and Unit Labor Cost.

EUR/USD short-term technical outlook

Technical readings on the 4-hour chart hint at further EUR/USD declines. The pair trades below all its moving averages, with the 20-period Simple Moving Average (SMA) declining below the 100-period SMA while remaining above the 200-period SMA. The shorter moving average provides resistance at 1.1695, while the 100-period SMA at 1.1740 caps the upside. At the same time, the Momentum indicator holds below its midline and trends lower, as does the Relative Strength Index (RSI) indicator, currently at 37. Indicators' strength is uneven, but supports the case for lower lows.

In the daily chart, EUR/USD trades just above a flat 100-day SMA at 1.1667, while the weekly low stands at 1.1659, suggesting a break through the 1.1660 area would trigger a steeper decline. In the same chart, the 20-day SMA holds around 1.1739, reinforcing the 1740 resistance area marked in smaller time frames. Finally, the Momentum indicator remains flat below zero, while the RSI indicator aims south around 42, in line with the dominant bearish trend.

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